Calculations
The Basic State Pension is based on the National Insurance record of the individual (this is called a Category A pension).
Each year that National Insurance was paid is called a qualifying year. For 2011:2012 to be a qualifying year you need to earn at least £5304 if you are an employee, or £5315 if you are self-employed, and have paid (or been credited with) National Insurance contributions based on these earnings. Men born after 5 April 1945 and women born after 5 April 1950 need 30 qualifying years for a full Basic State Pension, with a single qualifying year required to get any State Pension. Men born before 6 April 1945 needed 44 qualifying years for a full Basic State Pension, and women born before 6 April 1950 needed 39 years; to get any State Pension, an individual needed 25 per cent of the qualifying years required for a full pension.
Individuals with less than a full record of qualifying years, may elect to pay voluntary National Insurance contributions, in order to boost their record for pension purposes.
People in certain circumstances, such as caring for a severely disabled person for more than 20 hours a week or claiming unemployment or sickness benefits, gain National Insurance credits.
The amount of the Basic State Pension that you actually receive is calculated by multiplying the full rate by the number of your qualifying years and dividing by the number of years needed for the full rate.
If you paid NI contributions between April 1961 and April 1975 you would have earned a small Graduated Retirement pension.
If you paid NI contributions between April 1978 and April 2002 you would have earned an additional pension from the State Earnings Related Pension Scheme, although this will be very small if you were "contracted out" of this arrangement. Since April 2002 NI contributions have earned an additional State Second Pension.
Read more about this topic: UK State Pension
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