EIM74601 – Social security pensions: the state pension
Part 9 Chapter 5 ITEPA 2003
The state pension is a contributory benefit based on the payment
of National Insurance contributions.
The state pension is commonly called the National Insurance
retirement pension, the state retirement pension or the social
security retirement pension.
The state pension is taxable (see
EIM74600).
Who qualifies for the state pension?
An individual qualifies for the state pension if he or she
reaches pensionable age and satisfies the contribution conditions.
Pensionable age is 65 for men and 60 for women.
War widows (see
EIM76103) and industrial widows (see
EIM76200) over the age of sixty may be
entitled to the state pension by virtue of their National Insurance
contributions. Where this happens the state pension will be paid in
addition to the war or industrial widow's pensions.
Deferring the state pension
For many years, anyone meeting the requirements for receiving
the state pension (that is, having reached pensionable age and
having a sufficient National Insurance Contributions record) has
been able to defer receipt of the state pension by not submitting a
claim for the pension. Anyone deferring their pension is
compensated for the amount foregone by receiving enhanced weekly
pension payments once they do submit a claim.
However, the rules changed with effect from 6 April 2005 as
part of the Government’s policy of encouraging flexible
retirement.
Anyone already deferring their claim at 5 April 2005 or
beginning a period of deferral after that date can choose to defer
for as long as they wish. If the period of deferral after 6 April
2005 is less than 12 months, then the pensioner will receive an
increased weekly rate of state pension. This is little changed from
the previous position.
However, where a person defers for a period of more than 12
months beginning on or after 6 April 2005, then in respect of the
amount foregone after 6 April 2005 the pensioner can choose to
receive either
- an increased weekly amount of state pension, or
- a lump sum, and the weekly state pension paid at the standard rate.
The lump sum is taxable (see EIM74650).
