How-to Guides » Get ready to retire

Make the most of the Basic State Pension

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The Basic State Pension is money you get from the Government when you reach a certain age. On current rates (for the 2012/13 tax year) it provides a maximum weekly income of £107.45 a week. You'll only qualify for the maximum amount if you have built up enough qualifying years and paid enough National Insurance (NI) contributions before State Pension age.

To find out how much of the Basic State Pension you’re entitled to, get a State Pension forecast. If you’re more than four months away from retirement you can get a forecast online from GOV.UK.

You might find you don’t qualify for the full Basic State Pension if you don’t have enough qualifying years and there are gaps in your NI record. For each qualifying year that you have earned, you will get some Basic State Pension. But don’t panic because you can make up the shortfall by buying missing years with voluntary NI contributions.

When to start
You'll also need to think about when to take your Basic State Pension. You won't be entitled to start receiving any income until you reach the State Pension age. You can find out when this will be at the GOV.UK website. However, by delaying when you take the State Pension, you could receive a significantly higher income.

If deferring your State Pension makes sense, you have two choices: receive a higher weekly state pension at a later date or take an extra lump sum payment now. If you go for the lump sum option, you'll receive the State Pension at the normal rate when you eventually start taking it. 

Even if you have already started claiming, you can choose to stop receiving benefits for a time to build up an extra income or lump sum.

To receive extra weekly State Pension, you must defer for at least five weeks. However, if you want to receive a lump sum payment, you must put it off for a minimum of a year.

Other benefits
On top of the Basic State Pension you may qualify for a host of other benefits when you retire, depending on how much income you have. Extra cash for pensioners is available to cover the cost of heating, travel, health, TV licensing, as well as Pension Credit which can be a welcome boost to your State Pension if you're on a low income in retirement.

You can find out more about these at the GOV.UK website.