In November 2023, the Chancellor confirmed that the State Pension would rise by 8.5% (in line with average wage growth) in April 2024. With many retired households still facing significant living cost pressures, this came as welcome news. Yet what does this planned rise mean for your retirement income? How can you ensure that you get the best State Pension deal?

There is a great deal of confusion in British society about pensions, how they work, and how to get the most out of them. Below, our Carlisle financial planners at Vesta Wealth explain the distinctiveness of the State Pension (especially the “new” State Pension) and how to maximise its benefits for your household. We hope these insights are useful to you. Please contact us for more information or to speak with a financial adviser:

t: 01228 210 137`
e: [email protected]


What is the new State Pension?

The State Pension, in simple terms, is an income provided to individuals that they can claim after reaching their State Pension age (currently 66 for men and women in 2024, but set to increase to 67 by 2028). However, the picture is more complex due to two broad systems – the “old” (or basic) State Pension and the new State Pension. So, what is the difference, and which one applies to you?

The government brought in the new State Pension on 6 April 2016 to try and simplify the complicated pension system. The “old” State Pension comprised two parts – the Basic State Pension and the Additional State Pension (sometimes called the State Second Pension, or SERPS).

Those who attained their State Pension age before 6 April 2016 are subject to the “old” State Pension system. Anyone reaching their state pension age after this date, they fall into the new State Pension system. As things currently stand, if you have not reached state pension age yet then the ‘new’ state pension will apply to you. In 2023-24, the “full” new State Pension provides £203.85 per week.


Why is the full new State Pension important?

As many as 44% of those over their State Pension age rely on the State Pension as their primary source of retirement income. For poorer households, it is usually indispensable; yet even wealthier households can benefit tremendously from the £10,600.20 offered by the full new State Pension in 2023-24 (or £21,200.40 when a couple combines two incomes).

The State Pension offers two further advantages – longevity and value preservation. Firstly, it provides an indefinite income once claimed (expiring upon the claimer’s death). Secondly, the income rises each year by at least 2.5% via the “triple lock” system, helping the claimer to retain its spending power in the face of inflationary cost rises.

These benefits help to highlight why it is worth putting in every effort to get the best State Pension deal. Yet how can you ensure the maximum income possible?


Ideas to get the best State Pension

It is worth mentioning that you need at least 10 years of “qualifying” National Insurance contributions to receive any State Pension. If you have spent much of your career working overseas (e.g. in international schools), therefore, it is worth checking your NI record to ensure that you have at least this amount. You can check this online using the government’s portal.

To get the full new State Pension, however, you need at least 35 “qualifying” years of NI contributions under your belt. For many people, their NI record builds automatically via the PAYE system (where contributions are made automatically via their paycheque).

However, there may have been circumstances when you did not “complete” a NI year so that it is not deemed a “qualifying” year. For instance, temporary career breaks to raise children or recover from a serious illness or injury might have halted/reduced your contributions at various points. These will be indicated on your NI record.

In many cases, these “gaps” can be “patched” by making voluntary NI contributions. Normally, this can only be done up to the past 6 tax years. However, these rules have been temporarily “extended” until 5 April 2025. Until this time, individuals can make voluntary NI contributions as far back as 6 April 2006.

To pay for a full missing year of NI contributions for the 2023-24 tax year costs £907.40, although note that the ‘cost’ of voluntary contributions for other tax years does vary. Each additional qualifying year of NI contributions provides an extra £302.64 each year to an individual’s pre-tax State Pension. As such, for the 2023-24 tax year, the contribution starts to pay for itself by year three. Assuming you are in good health and expect to live at least this much longer, the voluntary NI contribution could be a very worthwhile investment.

There are other ways to increase your State Pension. Deferring your State Pension increases the income by 1% for every 9 weeks of deferral. For instance, waiting a full year after reaching your State Pension age could provide an extra £11.82 per week. Speak with your financial adviser to explore the full range of State Pension options available to you.



If you would like to discuss your financial plan and retirement strategy, then we would love to hear from you. Get in touch with your Financial Planner here at Vesta Wealth in Cumbria, Teesside and across the North of England.
Reach us via:

t: 01228 210 137
e: [email protected]

This content is for information purposes only. It should not be taken as financial or investment advice. To receive personalised, regulated financial advice regarding your affairs please consult your Financial Planner here at Vesta Wealth in Cumbria, Teesside and across the North of England.


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