Guide to UK State Pensions (2025–26 Tax Year)
- Stephen James Mitchell
- Jul 26
- 7 min read
Updated: Sep 4
The UK State Pension is a regular payment from the government, designed to provide a base level of income once you reach State Pension age. It is not means-tested, which means your entitlement depends on your record of National Insurance (NI) contributions rather than your level of wealth or income in retirement.
There are two systems in place:
New State Pension – For those reaching State Pension age on or after 6 April 2016. The full rate for the 2025–26 tax year is £230.25 per week, or about £11,973 annually.
Basic (Old) State Pension – For those who reached State Pension age before 6 April 2016. The full rate for 2025–26 is £176.45 per week, around £9,175 annually.
These figures increase each year under the government’s triple lock guarantee. You can also boost your entitlement with extra NI contributions.
How It Adjusts Each Year
The triple lock ensures your State Pension rises annually by the highest of:
Average earnings growth
Consumer Price Index (CPI) inflation
2.5%
For the 2025–26 tax year, this formula produced a 4.1% increase, meaning retirees will see more generous payments compared to the previous year.
Qualifying Years: How Much You Need
Your entitlement depends on how many qualifying years of NI contributions or credits you have built up.
New State Pension: You need 35 qualifying years for the full amount.
Old State Pension: You need 30 qualifying years.
Minimum entitlement: At least 10 qualifying years are required to get any State Pension.
Each qualifying year counts as 1/35th of the new State Pension. So, for example, if you have 20 years, your pension would be 20/35ths of £230.25 (about £131.57 per week).
What Counts as a Qualifying Year?
Class 1 NI contributions – Paid by employees.
Class 2 contributions – Paid by self-employed individuals.
Class 3 contributions – Voluntary contributions used to fill gaps.
NI credits – Awarded in certain cases, such as for carers, those on Child Benefit, or periods of unemployment.
Checking and Improving Your Pension Outlook
Checking Your Forecast
The government offers a State Pension forecast tool online. This allows you to:
View your projected weekly, monthly, and annual payments.
See any gaps in your NI record.
Confirm your exact State Pension age.
You can also request a paper forecast by filling in Form BR19Â and sending it to the Newcastle Pension Centre.
Filling Gaps with Voluntary Contributions
If your record is incomplete, you may be able to pay voluntary contributions:
Class 2 contributions – £3.50 per week in 2025–26.
Class 3 contributions – £17.75 per week in 2025–26.
Each full extra year adds roughly £6.58 per week to your State Pension (about £342 per year).
Deadline for Backdating Contributions
Historically, you could only backdate contributions for six years. However, HMRC has temporarily allowed contributions to be made for gaps dating back to April 2006.
Important: From 6 April 2025, this will revert back to the normal six-year limit. Missing this deadline could mean losing out on up to 10 years of top-ups, potentially worth over £55,000 across a lifetime of retirement.
National Insurance Credits
Not everyone has a continuous work record, but you may still build qualifying years through NI credits. Examples include:
Claiming Child Benefit for a child under 12.
Being a registered carer.
Receiving certain benefits such as Jobseeker’s Allowance or Employment and Support Allowance.
Credits can fill gaps in your record without you having to make cash contributions, making them especially valuable for parents, carers, and those with career breaks.
Delaying (Deferring) Your UK State Pension
If you don’t need your State Pension immediately, you can choose to defer claiming it.
For every nine weeks you defer, your pension increases by about 1%. Over a year, that’s approximately a 5.8% boost.
Example: If you defer for a year, your weekly pension of £230.25 could rise by around £13.35, providing an annual increase of nearly £694 for life.
This option is most beneficial if you are in good health and expect to live longer, as the additional income builds up over time.
Is the State Pension Taxable?
Yes. The State Pension counts as taxable income.
For 2025–26, the personal allowance remains at £12,570.
If your total income (including workplace pensions, savings interest, or part-time work) stays below this threshold, you won’t pay tax.
If your income exceeds it, your State Pension is taxed at your marginal rate.
Importantly, tax is not deducted at source from your State Pension. Instead, HMRC adjusts your tax code to collect what’s owed from other income sources, or through Self Assessment if required.
Voluntary National Insurance Contributions
Why Pay Voluntary Contributions?
If you have fewer than 35 qualifying years, topping up your record can be an excellent investment. Each additional year adds 1/35th of the full new State Pension, which in 2025–26 equals about £6.58 per week or £342 per year of retirement income.
Considering that a Class 3 contribution costs £17.75 per week (about £925 a year), it typically pays for itself in just 3–4 years of retirement. After that, it’s pure gain for life.
Current Contribution Rates (2025–26)
Class 2 contributions – £3.50 per week
Class 3 contributions – £17.75 per week
Class 2Â is usually for self-employed people or those working abroad. Class 3Â is available for anyone with gaps in their NI record.
The April 2025 Deadline
Until 5 April 2025, HMRC allows backdated voluntary contributions to cover missing years all the way back to 2006. After this date, the standard six-year backdating limit will apply.
This makes the next few months critical. Missing the deadline could mean losing out on up to 10 extra years of contributions—worth as much as £55,000 of lifetime pension income.
Can You Transfer a State Pension Abroad?
You cannot transfer the UK State Pension into another country’s pension scheme or into a private plan. However, you can still receive your UK pension while living abroad.
Payments can be made into either a UK bank account or an overseas account.
The pension will be paid in the local currency if you choose a foreign account, and exchange rates will affect the amount received.
Overseas Uprating Rules
If you live in a country within the European Economic Area (EEA), Switzerland, or a country with a social security agreement with the UK, your State Pension will increase each year under the triple lock.
If you retire to a country without such an agreement (for example, Canada or Australia), your pension may be frozen at the level it was first paid, without annual increases.
Tax Considerations Abroad
Your UK State Pension remains subject to UK tax rules. However, if there is a double taxation agreement between the UK and your country of residence, you may avoid paying tax twice. You will need to notify HMRC if you move abroad and claim the appropriate treatment.
The State Pension and Retirement Planning
While valuable, the State Pension is rarely enough on its own to provide a comfortable retirement. According to the Pensions and Lifetime Savings Association (PLSA):
The State Pension covers the minimum retirement living standard but falls short of moderate or comfortable standards.
For a moderate lifestyle, individuals may need to supplement their State Pension with private savings or workplace pensions worth £165,000–£250,000.
For a comfortable lifestyle, additional savings of £300,000–£460,000 may be necessary.
This highlights the importance of treating your State Pension as a foundation, not the full plan.
Future Changes to Keep in Mind
State Pension Age
Currently 66Â for both men and women.
Will rise to 67 by 2028.
Scheduled to increase again to 68 between 2044–2046, although reviews could bring this forward.
Triple Lock Commitment
The triple lock remains in place for 2025–26, but its long-term future is uncertain, as the rising costs place increasing strain on government finances.
Quick Reference Tables
Weekly Pension Rates (2025–26)
Pension Type | Weekly Rate | Annual Equivalent |
New State Pension | £230.25 | £11,973 |
Basic State Pension | £176.45 | £9,175 |
Voluntary NI Contribution Rates (2025–26)
Contribution Class | Weekly Cost | Annual Cost |
Class 2 | £3.50 | £182 |
Class 3 | £17.75 | £925 |
State Pension FAQs
Q: How many years of NI do I need for a full pension?
A: 35 years for the new State Pension, 30 years for the basic pension.
Q: Can I get a pension with fewer years?
A: Yes, with a minimum of 10 years you’ll get a reduced amount.
Q: Can I defer my pension for higher payments?
A: Yes. Deferring increases your pension by 1% for every nine weeks, around 5.8% per year.
Q: Is the State Pension taxable?
A: Yes, it is added to your income and taxed above the personal allowance (£12,570 in 2025–26).
Q: Can I receive my pension if I live abroad?
A: Yes, though whether it increases each year depends on your country of residence.
State Pension Retirement Checklist
Check your National Insurance record for gaps.
Get a State Pension forecast from GOV.UK.
Top up missing years before the April 2025 deadline.
Claim any NI credits you’re entitled to (e.g., carers, Child Benefit).
Consider whether to defer your pension for higher income.
Review how your pension will be taxed alongside other income.
Plan to supplement your State Pension with private or workplace pensions.
Maximise Your State Pension Benefits
The State Pension is a guaranteed, government-backed foundation for your retirement. But with changing rules, strict contribution deadlines, and the complexity of NI records, making informed decisions is essential.
If you’re unsure how many qualifying years you have—or whether you should pay voluntary contributions—professional guidance can help you avoid costly mistakes.
Together, we’ll ensure you maximise your State Pension and plan confidently for the years ahead.