New State Pension

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

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.

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.

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.

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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

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.

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

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 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.

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

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.

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?

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

We ALL earned it.

crazyH - you certainly did earn it !

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