The UK switched to the new State Pension in April 2016. If you’re confused about which system applies to you and how the two compare, here’s a clear breakdown.
Which System Am I On?
| Your situation | Your system |
|---|---|
| Reached State Pension age before 6 April 2016 | Old State Pension |
| Reached State Pension age on or after 6 April 2016 | New State Pension |
| Haven’t reached State Pension age yet | New State Pension |
It doesn’t matter when you started working or paying NI — only when you reach State Pension age.
Key Differences at a Glance
| Feature | Old State Pension | New State Pension |
|---|---|---|
| Full weekly amount (2026/27) | £176.45 (basic only) | £230.25 |
| Structure | Basic + additional (SERPS/S2P) | Single flat rate |
| Qualifying years for full amount | 30 years (basic) | 35 years |
| Minimum years for any pension | 1 year | 10 years |
| Additional earnings-related element | Yes (SERPS/S2P) | No (flat rate) |
| Contracting out affected it? | Yes — significantly | Yes — through starting amount |
| Deferral rate | ~10.4% per year | ~5.8% per year |
| Inheritable? | Up to 50% of additional pension | Limited (protected payments only) |
The Old State Pension Explained
The old system had two (or three) components:
1. Basic State Pension
| Detail | Amount |
|---|---|
| Full rate 2026/27 | £176.45/week |
| Qualifying years needed | 30 |
| How you qualified | Paying NI or getting NI credits |
2. Additional State Pension
| Scheme | Period | How it worked |
|---|---|---|
| SERPS | 1978–2002 | Earnings-related; tied to actual salary |
| S2P (State Second Pension) | 2002–2016 | Modified earnings-related; more generous for lower earners |
The additional pension could add anywhere from a few pounds to over £180/week, depending on your earnings history and how long you contributed.
3. Graduated Retirement Benefit
A small earnings-related scheme from 1961–1975. Most surviving recipients get only a few pounds per week from this.
Contracting Out
Many people were “contracted out” of the additional State Pension through their workplace pension. This meant:
- Lower NI contributions (or employer’s pension scheme rebate)
- No SERPS/S2P entitlement for those years
- Higher workplace pension instead
If you were contracted out for many years, your old state pension would be lower than someone who was always contracted in.
The New State Pension Explained
How It Works
A single flat-rate pension based on your NI record:
| Qualifying years | Weekly amount | Annual amount |
|---|---|---|
| 10 (minimum) | £65.79 | £3,421 |
| 20 | £131.57 | £6,842 |
| 30 | £197.36 | £10,263 |
| 35 (full) | £230.25 | £11,973 |
The Starting Amount
When the new State Pension launched in April 2016, everyone’s existing entitlement was calculated under both the old and new rules. You got whichever was higher:
| Calculation | What it produced |
|---|---|
| Old rules calculation | Basic pension + additional pension - contracting out deduction |
| New rules calculation | Years × new flat rate amount |
| Your starting amount | Higher of the two |
If your starting amount was above the full new rate, the excess became a protected payment.
If your starting amount was below the full new rate, you could build it up through further NI contributions.
Winners and Losers of the Transition
| Group | Impact |
|---|---|
| Winners | Self-employed (now get full pension vs half before), low earners, people with gaps, women with caring breaks |
| Losers | High earners who were contracted in (lost access to generous SERPS), people with less than 10 qualifying years |
| Neutral | People with complete records under either system |
Why Some People Get More Than £230.25/Week
If your old-rules calculation (basic + SERPS/S2P - contracting out) exceeded the new full rate:
Example: Margaret reached State Pension age in 2017.
- Old rules: £119.30 basic + £145 additional = £264.30
- New rules: £155.65 (full rate at the time)
- Starting amount: £264.30 (old rules higher)
- Protected payment: £264.30 - £155.65 = £108.65
Margaret gets more than the full new rate because of her generous SERPS entitlement under the old system.
Deferral Differences
| Feature | Old system | New system |
|---|---|---|
| Weekly increase rate | 1% per 5 weeks (~10.4%/year) | 1% per 9 weeks (~5.8%/year) |
| Lump sum option | Yes (taxable, with interest) | No |
| Break-even period | ~10 years | ~17 years |
| Inheritance of deferral | Can be inherited as lump sum or increase | Limited inheritance |
The old system was significantly more generous for deferral — roughly double the rate. If you’re on the old system and deferring, the maths are much more favourable.
Inheritance Differences
| Feature | Old system | New system |
|---|---|---|
| Basic pension | Can top up surviving spouse’s basic pension | Not inheritable |
| Additional pension | Up to 50% inheritable by spouse | Not applicable |
| Protected payment | — | Up to 50% inheritable |
| Deferred increase | Inheritable (lump sum or weekly) | Limited |
See our full State Pension Inherited by Spouse guide for details.
How to Find Out What You’re Getting
| What to check | How |
|---|---|
| Your state pension forecast | gov.uk/check-state-pension |
| Your NI record | gov.uk/check-national-insurance-record |
| Whether you were contracted out | Check old payslips (NI letter D or E = contracted out), or contact HMRC |
| Old pension statement | If already receiving, check your annual uprating letter from DWP |
Commonly Confused Points
| Confusion | Reality |
|---|---|
| “I paid into SERPS so I should get it” | If you reached SP age after April 2016, SERPS is folded into your starting amount — not paid separately |
| “I was contracted out so I get less” | Contracting out reduces your starting amount, but you should have a workplace pension instead |
| “The new pension replaced everything” | Your old entitlement wasn’t lost — it was converted into a starting amount |
| “I can choose which system” | No — it’s determined by when you reach State Pension age |