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State Pension

The State Pension is made up of two parts: a flat-rate basic pension and an earnings-related additional pension, also called the State Second Pension.

Your entitlement to State Pension is based on the number of 'qualifying years', which are tax years in which you have paid, are treated as having paid or are credited with National Insurance contributions.

The number of qualifying years you normally need to qualify for a full basic State Pension is equal to about 90 per cent of your working life. This is calculated from the start of the tax year in which you reach 16 to the end of the tax year before the one in which you reach State Pension age.

• Understanding the basic State Pension (pensions and retirement planning section)

Additional State Pension

If you do not earn enough to pay National Insurance contributions, you can still build up an entitlement to additional State Pension, also called State Second Pension, if:

• Understanding the additional State Pension (pensions and retirement planning section)

Carer's Allowance and National Insurance contributions

For each week you receive Carer's Allowance you will normally get a National Insurance (NI) contribution credited to your NI record, unless you are a woman who has chosen to pay reduced rate NI contributions.

You will also normally be credited with an NI contribution for any week you are entitled to Carer's Allowance but it is not paid because you are also getting Widow's Benefit or Bereavement Benefits at the same or a higher weekly rate.

Home Responsibilities Protection

Home Responsibilities Protection (HRP) can protect your right to State Pension if you are caring for someone and you do not have enough National Insurance contributions or credits in a particular tax year. 

You should get HRP automatically if throughout a complete tax year you either:

If you are looking after someone who is sick or disabled and you do not get Income Support or Child Benefit, you will need to apply for each tax year in which you need HRP.

If you are entitled to Carer's Allowance, you will be credited with National Insurance contributions automatically and will not need HRP.

Changes for carers and parents from April 2010

Home Responsibilities Protection will be replaced for people reaching State Pension age on or after 6 April 2010.

From 6 April 2010, carers and parents will be able to build up qualifying years through new weekly credits for the basic State Pension and additional State Pension. If you are a carer or parent, you will get a credit for each week in which any of the following apply:

• you are caring for at least 20 hours a week for someone who gets Attendance Allowance, Constant Attendance Allowance or the middle-rate or highest-rate care component of Disability Living Allowance, or the need for care has been certified
• you get Child Benefit for children aged under 12
• you are an approved foster carer

Some of the detail around this change is subject to further parliamentary approval.

There will be no limit to the number of years in which you can get credits, as long as you meet the qualifying rules.

If you reach State Pension age on or after 6 April 2010, complete tax years of Home Responsibilities Protection you have already built up before 2010 will be converted into qualifying years up to a maximum of 22 years.

These qualifying years will also count towards bereavement benefits.

• Home Responsibilities Protection (general money, tax and benefits section)

Receiving Carer's Allowance and State Pension

If you are receiving Carer's Allowance and you start receiving State Pension at a higher rate than Carer's Allowance, you may stop receiving Carer's Allowance but continue to have an 'underlying entitlement' to it. For more about the effect of an underlying entitlement, see 'Carer's Allowance - effect on other benefits and entitlements'.

• Carer's Allowance - effect on other benefits and entitlements

Pension Credit

Pension Credit is an entitlement for people aged 60 and over who are living in Great Britain. It could top up your weekly income to a guaranteed minimum level. If you are aged 65 or over and have saved towards your retirement you could receive extra money on top of this. 

You may also get extra money if you or your partner - if you have one - have caring responsibilities, are severely disabled or have housing costs, like a mortgage for example.

From 6 April 2010, the State Pension age for women will gradually start to increase from the current State Pension age of 60. The age from which people can get Pension Credit will increase in line with this.

• Understanding Pension Credit (pensions and retirement planning section)