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How much State Pension will you be entitled to?

To qualify for the basic State Pension you need to build up enough 'qualifying years' before you reach State Pension age. A qualifying year is a tax year in which you have sufficient earnings upon which you have paid, are treated as having paid or have been credited with, National Insurance contributions (NICs).

In 2008-2009 you need to have £4,680 or more of such earnings as an employee, or £4,825 or more if you are self-employed.

Depending on how many qualifying years you have you'll get a basic State Pension between the weekly minimum and maximum.(For the 2008-2009 tax year these are £22.68 and £90.70.) If you don't have enough qualifying years, you'll receive a smaller basic State Pension, or you may not receive any at all.

• Understand more about the basic State Pension

Getting a State Pension forecast

A State Pension forecast gives you an estimate of how much State Pension you can expect to receive at State Pension age based on the current information about you. State Pension forecasts are currently only available for people who reach State Pension age on or before 5 April 2010.

• More about getting a State Pension forecast

Topping up your State Pension

If there are some tax years which do not count as qualifying years it's worth seeing if you can boost your basic State Pension by paying voluntary National Insurance contributions for those years. You can pay voluntary National Insurance contributions back to 1996.

If you've missed paying National Insurance contributions because you were caring for a child or a sick or disabled person you should have been automatically credited with contributions for those years.

Find out more from The Pension Service by phoning 0845 3000 168 (textphone 0845 3000 169). Lines are open 8.00 am to 8.00 pm Monday to Friday, and 9.00 am to 1.00 pm on Saturdays.

• What to do about gaps in your National Insurance record
• Home Responsibilities Protection

Taking out a personal pension

Another way to make additional provision for your retirement is to take out a personal pension or a stakeholder pension. A stakeholder pension is a type of personal pension that must meet minimum government standards. For instance, you are allowed to make flexible payments and annual management charges are capped.

One of the main advantages of taking out a personal or stakeholder pension is that the government will pay tax relief on the contributions you make to your pension fund. For basic rate tax payers, this means that for every £80 paid into your fund, the government will pay a further £20.

• Understand more about personal pensions
• More information on stakeholder pensions

Joining a company (occupational) pension scheme

If you work for an employer who runs a company pension scheme and are able to join it, you should see if it's in your best interests to do so.

Ask the scheme administrators to explain the benefits the scheme provides and how much of your salary you will have to contribute.

If you change employment you will probably not be able to continue to pay into the scheme. But any pension that you have already built up you will still be entitled to on retirement or can transfer to another pension scheme.

• More information on company pensions Opens new window

How many pensions can I have?

You can take out as many pensions as you wish, but each scheme will have its own administration charges. It may be worth seeking advice from an independent adviser before taking out more than one scheme.

• Choosing and using a pensions adviser

Can I pay as much as I want into my pensions?

Since April 2006 you can contribute as much as you want into any number of pension schemes.  Each year you will receive tax relief on your pension contributions up to 100 per cent of your earnings (salary and other earned income), subject to an 'annual allowance' above which tax will be charged.

• Pension rules from April 2006

Financial advice

If you would like financial advice on catching up with your pension provision, there are several sources of free information available.  These include the Pensions Advisory Service and The Financial Services Authority (FSA). Or you can ask an independent financial adviser to help you.

• The Pensions Advisory Service Opens new window
• Contact details for the Pensions Advisory Service
• Information on pensions from the FSA Opens new window
• Choosing and using a pensions adviser

More useful links

• Learn more about pension plans through your employer
• Home Responsibilities Protection – State Pension help for carers