FOR ADVISERS ONLY
Basic State Pension explained
Basic State Pension
- It had to be claimed; it wasn't paid automatically.
- You needed to have paid NI contributions for at least 30 years to get a full BSP.
- You got a proportionately smaller BSP if you had less than 30 qualifying years.
- You could be credited with qualifying years in certain circumstances.
- BSP increases each year by the highest of the growth in average earnings, CPI and 2.5%.
What is it?
The Basic State Pension (BSP) is a pension benefit paid to all eligible employees and the self-employed if they reached their State Pension Age (SPA) before 6 April 2016. It was not paid automatically; it needed to be claimed. It is not means tested.
Who can get it?
Anyone, including the self-employed, who had enough 'qualifying years' and had reached their State Pension Age (SPA) before 6 April 2016 could claim BSP - unlike the State Second Pension, which was available only to the employed.
Qualifying years
If you'd paid or had credited enough National Insurance (NI) contributions in the tax year, it would have counted as a qualifying year.
It was possible to pay voluntary contributions for any years in which you hadn't paid NI contributions or not enough for it to count as a qualifying year.
From 6 April 2010, the number of required qualifying years for a full BSP was 30 for men and women. If you had less than 30 qualifying years your BSP was reduced proportionately with no minimum number of qualifying years required.
When can you get it?
BSP is only paid to people who reached their SPA before 6 April 2016. If you reached SPA after then you would receive the New State Pension.
Check your State Pension age - GOV.UK
It was possible to defer taking BSP on reaching SPA in exchange for a higher starting level or a taxable lump sum payment.
How much is it?
The current and previous rates of BSP can be found on our rates and factors page.
Check your State Pension - GOV.UK
Does BSP increase in payment?
Yes, the rate of BSP increases from April each year by at least the level of growth in average earnings. A triple guarantee applies so that the Basic State Pension increases each year by the highest of:
- growth in average earnings
- prices increases (the increase in CPI at the previous September) or
- 2.5 per cent.
Note
The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice. Also it may not reflect the options available under a specific product which may not be as wide as legislations and regulations allow.
All references to taxation are based on our understanding of current taxation law and practice and may be affected by future changes in legislation and the individual circumstances of the investor.
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