State pension

By Tolley

The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • State pension
  • Introduction
  • State pension age
  • Entitlement to state pension
  • Deferring the state pension
  • The over-80 pension
  • Taxation of state pension income
  • Pension credit


The state pension is paid from the National Insurance Fund, with contributions by current taxpayers used to fund the current state pensions. There is no investment to meet the future pension needs of current taxpayers.

Reaching state pension age prior to 6 April 2016

Where the individual reached state pension age before 6 April 2016, there are three types of state pension payable in the UK:

  • category A ― the basic state pension and state second pension (S2P, formerly SERPS), based on the individual’s national insurance contribution (NIC) record
  • category B ― the basic state pension and S2P, based on the taxpayer’s spouse or civil partner’s NIC record (can be claimed if the spouse / civil partner’s record is better than his own)
  • category D ― the supplement payable to those pensioners over 80 years old irrespective of contribution record (currently £0.25 per week)

Categories A and B are mutually exclusive; an individual cannot claim astate pension under both. However, taxpayers in receipt of acategory A or B pension will be entitled to acategory D supplement once they reach 80 years of age.

Reaching state pension age from 6 April 2016 onwards

Where the individual reaches state pension age on or after 6 April 2016, the single-tier state pension applies. The GOV.UK website  helpfully states that this will apply for men born on or after 6 April 1951 and women born on or after 6 April 1953. All previous NIC records are recognised.

The amount received depends on the individual’s NIC record. For details of how the amount is calculated, see the GOV.UK website .

The single-tier pension is designed to address some of the problems of

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