State Pensions

Your State Pension is the foundation of retirement income in the UK. Most people also build a private pension, through a workplace scheme or a personal plan, to top up what they receive from the state.

The UK State Pension, quick facts

  • How much in 2025/26
    The full new State Pension is £230.25 per week in 2025/26, paid every four weeks. The exact amount you get depends on your National Insurance record.

  • Qualifying years
    You need 10 qualifying years for any new State Pension, and typically 35 qualifying years for the full rate. Years can come from paying National Insurance, receiving credits, or paying voluntary contributions.

  • When you can claim
    The State Pension age is 66 today. It rises to 67 between 2026 and 2028, then to 68 between 2044 and 2046 under current legislation. Use the official checker to see your exact date.

  • How to claim and how it is paid
    You must claim the State Pension, it is not automatic. Payments arrive every four weeks, into your chosen account. You can choose to defer claiming, which increases the weekly amount you receive when you do start.

  • Deferring, what you gain
    If you reached State Pension age on or after 6 April 2016, deferring adds about 1% for every 9 weeks, which is just under 5.8% for each full year you defer. The extra is taxable like your normal pension income.

  • If you live abroad
    You can claim from overseas. Annual increases apply if you live in the EEA, Gibraltar, Switzerland, or in countries that have a social security agreement with the UK that allows uprating.

Building more with private pensions

There are two main types of private pension.

  • Defined contribution, DC
    You and often your employer pay into a pot that is invested. What you get depends on contributions, investment returns, and charges.

  • Defined benefit, DB, sometimes called final salary
    Usually provided by larger employers. It pays a guaranteed income based on salary and years of service. These schemes are less common to join now.

Automatic enrolment, the minimums

All employers must offer a workplace pension and automatically enrol eligible staff. The legal minimum total contribution is 8% of qualifying earnings, with at least 3% from the employer and the rest from the worker, often with tax relief added to the worker’s part.

Tax relief on your contributions

Most people get tax relief at 20% automatically into their pension under relief at source. Higher and additional rate taxpayers may need to claim extra relief through Self Assessment or the HMRC service. Even if you do not pay tax, you can usually get tax relief on up to £2,880 a year paid in personally, which the provider tops up to £3,600.

When you can access a private pension

You can normally access a defined contribution pension from age 55, rising to 57 from 6 April 2028. Special protections and ill health rules can allow earlier access in limited cases.

Taking money from a defined contribution pot

Common options include, and you can mix them:

  • Tax free lump sum up to 25%, capped at £268,275 for most people

  • Flexible drawdown, income from invested funds

  • Annuity, a guaranteed income for life
    The remainder you take after your tax free portion is taxed as income in the year you receive it. Getting advice before drawing can help you avoid unnecessary tax.

Private pensions, pros and cons at a glance

Potential advantages

  • Employer contributions, a guaranteed top up to your retirement saving

  • Tax relief on what you pay in, often added automatically

  • Investment growth over the long term with the option to diversify

  • Flexible access from 55, 57 from April 2028, with 25% usually tax free, up to the permitted limit

  • Choice of products, including drawdown and annuities to match different needs

Things to watch

  • Investment risk, the value can fall as well as rise

  • Charges, higher fees reduce long term returns

  • Tax on withdrawals, amounts above your tax free portion are taxed as income

  • Access rules, usually no access before 55, 57 from April 2028, unless you have a protected pension age or retire due to ill health

  • Benefit interactions, private pension income may affect means tested benefits in later life

How PK Financial Services helps

  • Check your State Pension forecast and your National Insurance record, explain gaps and options to top up

  • Design a workplace pension setup that meets the legal minimums and is simple for staff, including payroll links

  • Build a private pension plan that fits your risk level and timeline, and review charges and fund choices

  • Plan tax efficient withdrawals, coordinate lump sums, drawdown and annuities, and avoid higher rate tax where possible

  • Keep you compliant with automatic enrolment and reporting requirements