Rules
In order to qualify for a State Pension (Contributory) you must be aged 66 and have enough Class A, E, F,G, H, N or S social insurance contributions.
You need to:
- Have paid social insurance contributions before a certain age
- Have a certain number of social insurance contributions paid and
- Have a certain average number over the years since you first started to pay.
Paid insurance before a certain age
You must have entered social insurance before a certain age. For people currently under 66, they must have started to pay social insurance before the age of 56. The age limit is higher for people born before 1922.
Entry into insurance
Your
entry into insurance means the date on which you first started to pay social insurance.
The rules that determine when you entered into insurance are quite complex for those with mixed insurance, that is, full social insurance for some of the time and modified at other times.
Normally the date of starting insurable employment is taken as the date of the first paid employment contribution. However for a person who has a mixture of full and modified rate contributions and paid his/her first full-rate employment contribution before 6 April 1991, the most favourable date of starting insurable employment is taken. This means, if you first started to pay full insurance before 6 April 1991 and before you reached 56 years of age, your entry into insurance can be the date on which you first started to pay the full-rate of insurance if that would be to your advantage.
If you started to pay full insurance after 6 April 1991, your entry into insurance is the time you first paid any social insurance.
There are also special entry into insurance rules for self-employed people. If you started to pay self-employed contributions on 6 April 1988 and had previously paid employee insurance at any time, then the date of entry into insurance can be either 6 April 1988 or the date on which you actually first paid insurance, whichever is to your advantage.
Number of paid contributions
If you reached pension age before April 6 2002, you must have 156 qualifying paid contributions (a total of 3 years but they do not have to be consecutive). This means that you must have actually paid full-rate contributions (that is, full stamp prior to 1979 and Class A,E,F,G,H,N and S since then.)
If you reach pension age on or after 6th April 2002, you will need to have 260 paid contributions (effectively 5 years contributions but they need not be consecutive). However, if you were a voluntary contributor on or before April 6 1997, you need only have 156 paid contributions if you have a yearly average of at least 20 contributions.
If you reach pension age on or after April 6 2012, you will need to have 520 paid contributions (10 years paid contributions). In this case, not more than 260 of the 520 contributions may be voluntary contributions. However, if you were a voluntary contributor on or before April 6 1997 and you have a yearly average of 10 contributions, you may meet the requirement if you have a total of 520 contributions, but only 156 need to be compulsory paid contributions.
Pre-1953 contributions
In some cases, contributions paid before 1953 into the then National Insurance Scheme may be taken into account in order to satisfy the requirement that you have 156 paid contributions. In fact, each 2 such contributions are counted as 3. But, if they are taken into account, the average must be measured from 1953. There is a special pro-rata pension for people with pre-1953 contributions.
Average number contributions per year
You must meet the average condition. This is probably the most complex aspect of qualifying for a State Pension (Contributory).
Normal average rule
The normal average rule states that you must have a yearly average of at least 10 appropriate contributions paid or credited from the year you first entered insurance or from 1953, whichever is later. An average of 10 entitles you to a minimum pension; you need an average of 48 to get the maximum pension.
Alternative average rule
This alternative average only applies to people who reach pension age on or after 6 April 1992.
It requires that you have an average of 48 Class A, E, F, G, H, N or S contributions (paid or credited ) for each contribution year from April 1979 to the April before your 66th birthday. This average would entitle you to the maximum pension. There is no provision for a reduced pension when this alternative average is used.
So, if you reach the age of 66 on or after April 6 1992, your average will be looked at in two ways - the usual average will be assessed and the alternative average will be assessed. Most employed or formerly employed people will be able to meet the alternative average. The alternative average will probably be looked at first because it is easier to assess. If you do not have an average of 48 contributions from 1979 then the usual method of assessing the average will be looked at and you may get a reduced pension (if you do not meet the alternative average, it is virtually impossible for you to have an average of 48 using the normal average rule).