New State Pension

To me it’s a benefit because I didn’t earn it My ex-husband earned it while I looked after the children and was an unpaid acct for his practice

crazyH - you certainly did earn it !

We ALL earned it.

Factually it is a benefit.
It's a contributory benefit - part of our social security expenditure.

Who cares what they call it, providing it arrives in our bank account every 4 weeks? Did you object to the Family Allowance being called a benefit? We all got that if we are now Grandparents. Seriously why does it matter?

NotSpaghetti

Factually it is a benefit.
It's a contributory benefit - part of our social security expenditure.

Exactly. Also we are receiving it from current national insurance contributions, ie the current workforce. Our contributions when we worked and paid national insurance, went towards that generation's state pensioners. National insurance is also used to fund, other benefits and the NHS. National Insurance payments we have made over the years do not go into a personal pension pot, it gets used almost immediatly.

I knew a woman once who bought a horse with the Benefit money and called him Ben for short.

The problem is that we didn't "earn it" the cost of pensions has been topped you by general taxation and current contributions for many.

If we were paid the accumulation if our contributions it would be a fraction what we get.

It is something I earned and paid for!

State Pension is deemed a contributory benefit because people pay National Insurance Contributions as a tax on their earnings just as a workplace pension is a contributory benefit because people pay into a pension fund from their earnings. But as others have pointed out, it is not a personal pot. It's a general pot called the National Insurance Fund into which NIC paid by employers, employees and self employed is paid (after the allocation to the NHS). Out of this are paid current contributory benefits including maternity and bereavement benefits, the contrubutory element of JSA and ESA and one or two others. 95% of what is paid out from the NIF is State Pension.

Some who reached State Pension age before 6 April 2016, around 720,000, receive a State Pension for which they did not pay NIC. It’s effectively a legacy system which acknowledges that older pensioners, women primarily, either did not work outside the home, paid the small stamp or inherited pension from a late spouse.

For people who reached State Pension age before 6 April 2016, there are four categories of State Pension: A, B, C and D (and blends of A and B).

Only a Category A pension is wholly contributory.

The Category B pension is primarily paid for married women who paid the small stamp, which was not a contribution to the State Pension so is based on the husband’s NIC. A married man paid the same rate of NIC as a single person so no additional contributions have been paid towards the Category B pension which is paid at 60% of the rate of Category A.

A married man who did not pay NIC can also get a Category B pension claim based on his wife's NIC.

This system applies only to those who reached State Pension age before 6 April 2016.

There are also Categories AB, ABL and BL where the pension comprises a mix of entitlement where some NIC has been paid for the Category A part. The B element may include State Pension inherited from a late spouse.

The Category C pension is rare now, primarily paid to widows of individuals who reached pensionable age before 5 July 1948. It is non-contributory. In August 2025, there were only 8 people receiving this.

The Category D pension is paid to people age 80 or over and who have not paid any NIC. Claimants must have lived in the UK for at least 10 years out of any 20-year period (which must include the day before they turned 80 or any day after). In August 2025, there were 93,207 people receiving this. People who reached State Pension age on or after 6 April 2016 cannot claim this.

The vast majority of people who reached SP age before 6 April 2016 paid NIC and receive Category A only, some 5.2 million.

In August 2025, there were were just under 3 million people receiving pensions under categories AB, ABL, B, BL, C and D.

Of these, around 720,000 are B, BL, C and D, people receiving pensions for which no NIC was paid. (Source StatXplore).

The rate of Category B, C and D pensions is currently £106.70 per week rising to £110.75 from 6 April 2026.

The National Insurance system was conceived to provide a pension and health service for all it bears no comparison to pension revenue
In 2024 current NI revenue was £172bn expenditure was pensions £130bn, + NHS £240bn

Even current NI contributions cover under 50% of cost, the rest comes from general taxation

David. The NHS allocation from NIC has been around £35 billion in recent years. The much-maligned increase in employers NIC is to provide an addition £25 billion a year additional funds for the NHS by the end of the forecast.

NIC is ring-fenced. It cannot be spent on anything other than the NHS allocation and contributory benefits.

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David. The NHS allocation from NIC has been around £35 billion in recent years. The much-maligned increase in employers NIC is to provide an addition £25 billion a year additional funds for the NHS by the end of the forecast.

NIC is ring-fenced. It cannot be spent on anything other than the NHS allocation and contributory benefits.

That is in-line with my quoted figures, however you dress it up, general taxation has to contribute at least as much again. Saying the NIC increase is ring fenced is political speak, it's added to the NI revenue which only covers half the cost of NI

It isn’t political speak. It is how HMRC, who collect all the NIC paid and publish the annual report on the National Insurance Fund, explain it.

1.1. Introduction
The National Insurance Fund (NIF) holds National Insurance Contributions (NICs), paid by employees, employers, and the self-employed. Voluntary contributions are also paid into the Fund. Receipts paid into the NIF are kept separate from all other revenue raised by national taxes and are mainly used to pay social security benefits such as contributory benefits and the State Pension.

The NIF Account presents the receipts and payments for the financial year, as well as the balance on the Fund at the end of the year.

NICs also help to finance the National Health Service (NHS). NICs are paid into the NIF net of money allocated to the NHS.

www.gov.uk/government/publications/national-insurance-fund-accounts/great-britain-national-insurance-fund-account-for-the-year-ended-31-march-2024#accounts-direction-given-by-hm-treasury-in-accordance-with-section-1612-of-the-social-security-administration-act-1992

They allocate some to the NHS and use the remainder to pay contributory benefits keeping one-sixth of the estimated annual expenditure as a credit balance. This is a contingency against a temporary shortfall in NIC yield. This might be caused by people not working for any number of reason: large-scale strikes or redundancies, a pandemic etc.

In fact, the NIF is holding a much bigger credit balance than required, some £50 billion more than the £25 billion currently necessary. It is invested with the DMO and the interest credited to the fund, £8 billion in the last two years.

By 2040, the rising number of pensioners means the fund it expected to need topping up from Treasury.

Anyway, it’s getting off the subject of why the SP is called a benefit. As I said, some people who reached SP age before 6 April 2016 paid NIC towards the SP and some didn’t but the system takes account of a time when women did not work outside the home or did but paid the small stamp.

But it is a benefit whether you like the word or not. I get universal credit, I paid into the system just as you did for the pension.. There's no difference.

We have a similar problem with DHs industrial Injury diability Benefit. (IIBD) We think of it as a payment to cover his extra needs because of his injury (asbestos exposure) but all benefits agencies and our council consider it income so we don't qualify for council tax relief, housing benefit or pension credit.

Not necessary you get your stamp paid claiming many benefits it is possible to get full state pension having never worked.

Is your husband able to claim PIP Janetashbolr? That is not treated as income by HMRC.

At the end of the day, NIC is just another tax on wages. Some people pay a large amount of NIC and some pay none.

We do need safety nets to protect those who haven’t been able to work. An amount just below the rate of the nSP has been set for Pension Credit.

NIC has always been a bit of a con and very divisive.

Anyone who has been self employed under the old Class 2/Class 4 system knows that the Class 4 they paid on business profits didn’t count towards an Additional State Pension as SERPS/S2P did.

Paying Class 3 Voluntary contributions is an easy and cheaper way to buy missing contribution years. It currently costs £923 per year and will give you an extra £342 per year pension, so you are in profit by year 3.

Compare someone working full time on only minimum wage. They will pay NIC of £1,026. The employer will pay another £3,058, a total of £4084.

So someone works a year and £4084 goes into the goverment coffers. Don't work and buy a missing year later down the line and you pay £923. The end result is that both will receive an extra £6.58 pw pension at current rates.

Totally agree I worked hard over 40 years contributing a fair amount to get my state pension. I'm also a WASPI women so lost out on 6 years...Defo not a benefit!

It is a benefit, you didn't save for it, your taxes and NI paid for other people's pensions while you were working, and now your state pension is paid for by younger workers' tax and NI in turn. There has never been a state pension pot.

Absolutely!

Well whoopsy do. Then Reeves the thieves will raise more taxes and take the extra off us. Give with one hand, take away with another.

Yes, we have an increased SP but the day after my letter arrived I received another one from the taxman.
Not sure it will be much of an increase, if at all...

My state pension gone up my tax code changed do it looks like I am staying the same! 🤷‍♀️
I am on the old pension rate!!