Applying for State Pension: Everything You Need to Know

You’ve reached retirement age and now wonder how to apply for State Pension. Our guide addresses how to claim your State Pension, including when you’re eligible to apply, the requirements you need to fulfil, and how the application process works.

Do You Have to Apply for Your State Pension?

A State Pension is money paid by the government to those who have reached the State Pension age. The Pension is paid from the amount you contributed to the National Insurance (NI) scheme during your employment years. But to receive your State Pension, you must claim it by applying; it’s not automatically paid.

Before you reach the State Pension age, you’ll receive an invitation letter explaining what you need to do to claim your pension. But even if you haven’t received the letter and you’re four months from reaching the pension age, you can submit your claim.

When Can I Apply for My State Pension?

You can apply for the State Pension when you reach the qualifying age of 66. Another pension requirement is that you must have a minimum of 10 qualifying years on your National Insurance record, calculated by your contributions or credited to you in each tax year.

To add a qualifying year to your record, you need to contribute at least a minimum amount each year. Before applying for a State Pension, keep in mind that this amount changes yearly. So check if you’ve managed to meet the minimum each year. There’s also the possibility of paying ‘voluntary contributions’ to fill in any gaps in your record.

Pension Deferral

Just because you reach the qualifying age and have the necessary years on your record doesn’t mean that you need to claim your State Pension. It’s possible to have your pension deferred, i.e., you can apply for a state pension later. This can be beneficial because the pension increases by 1% for every nine weeks your pension is deferred.

If you decide to claim your State Pension 12 months after reaching retirement age, you can ask to have the pension backdated to the date of your entitlement and receive one lump-sum payment. If you start the claim after the initial 12 months, you can still have the pension backdated, but you won’t get the increase you’re entitled to.

How to Apply for State Pension

Once you’ve established that you’re eligible for a State Pension, you need to start thinking about how to apply. Fortunately, the process is quite simple.

The Requirements

You can submit a pension claim via post, telephone, or online. Regardless of the method you choose, you must submit the following information and documents.

• National Insurance number (and spouse or partner’s number)
• Proof of identity
• Date of most recent marriage, civil partnership, or divorce
• Details of time spent living and working abroad
• Bank or building society information
• Invitation code from the letter you received

The question of how to apply for your State Pension includes compiling all the documents listed above and submitting them to the Pension Service.

What to Expect Afterwards

Once you’ve submitted all the required documents, what’s next? There’s nothing more to do once you’ve submitted your claim, but it’s good to know what to expect.

The Payments

Your State Pension will be paid directly into your building society or bank account. If you don’t hold an account, you can receive your pension through the Payment Exception Service.

Following the question of how to apply for my state pension includes the frequency of payments. A State Pension is typically paid in arrears once every four weeks. The payments will increase at the start of each tax year, which falls on April 6th. The increase is based on the average percentage increase in prices.

How Much Will You Receive?

The amount of money you receive depends on the number of years on your National Insurance record. You receive:

• a proportion of the State Pension between 10 and 34 years of NI contributions
• the full pension after 35 years or more of contributions

‘How do I apply for my state pension?’ always comes with the consideration of how much money I should receive. In the 2022/23 tax year, a full pension amounts to £185.15 per week after taxes, with an annual retirement income of £9,627.80 (£12,570 before taxes). But if you have less than 35 years of contributions, you’ll receive only a portion of the pension.

Before you apply for a state pension, be sure that you’re not eligible for more than the full pension. This can occur if you’ve built up entitlement in the Additional State Pension while the old pension system was in place. The amount you receive on top of the full pension is referred to as a ‘protected amount’.

Key Takeaways

How to Apply for State Pension Online

The online application is the quickest way to apply—plus, you can access the government’s website 24/7. The online application process entails providing the same information and documents as the other ways of applying, only in electronic form. The online service is entirely safe and secure. And if you encounter difficulties when applying for the State Pension, you can contact the Help Desk by phone.

Can You Claim a State Pension and Continue Working?

This is one of the most frequently asked questions about pensions. Yes, you can, but there are several things you need to be aware of before thinking about how to apply for your state pension while still working.

Pros & Cons

Once you reach the State Pension age, you no longer need to contribute to the National Insurance scheme. And any income you make won’t affect the amount you receive from your State Pension.

But other income that flows your way is regarded as taxable income, which could put you in a higher tax band. And even though your pension payments won’t be affected by employment, some other benefits—such as the Pension Credit, Council Tax Support, and Housing Benefit—might become unavailable.

Other Alternatives

How to apply for my state pension and keep making money on the side is a popular question. You can keep working, but this could cause you to lose access to some benefits available to those in retirement. Fortunately, there are a few alternatives to make money on the side, even if you’re not regularly employed.

There are plenty of side hustle opportunities in the UK. For example, there are plenty of things you can buy and sell for profit on the UK market. Another great alternative is starting an investment portfolio. Consider buying shares and waiting for a return on your investment.

Do you have to apply for your state pension? Yes. Can you continue earning money? Yes. Remember that a State Pension doesn’t mean that you’ve reached the end of the road, regardless of whether you choose employment or an alternative way to make money.

Conclusion

You’ve reached the State Pension age, and now it’s time to claim your pension and reap the benefits of your lifelong contributions. To help seamlessly start your retirement, our guide has aimed to answer all your questions: When can I apply for my state pension? How do I apply? How much will I get? Can I keep working? Equipped with our guidance, you’re ready to start the application process.