It may seem like a long way off for many, but it's never too early to start thinking about your retirement.
Many employees qualify for Work Place Pensions through their job. Contributions are taken from their salary every month, which are often matched or topped up by the employer.
Those who earn more than £10,000 a year are automatically enrolled in Workplace Pension schemes if they are between 22 and state pension age.
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Then, when that employee reaches a certain age, often around 60, they can choose to start taking their pension. Generally, the older you are when you retire, the more you will get.
But not everybody qualifies for a Workplace Pension, or has paid into one.
In addition to private Work Place pensions, everybody who pays National Insurance contributions for a number of years qualifies for a State Pension from The Government. Those who have private pensions can still claim the State Pension too, which offers a handy top-up for retirement income. State Pensions are also a vital lifeline for those who have not got a Workplace Pension, or have not paid a large amount into one.
However, State Pension payouts depend on the National Insurance contributions and credits, either through working, claiming benefits, or a mix of the two.
Here we look at the rules for those reaching state pension age after April 2016, which means they qualify for the New State Pension.
How long you need to work for to claim New State Pension
To claim any state pension, you will need at least 10 years on your National Insurance record. To get the full amount, you need 35 years. The years do not have to be consecutive, there can be gaps.
National Insurance payments or credits included on records before April 6, 2016 are taken into account when calculating how much people get under the New State Pension.
Those are used to create a "starting amount". That amount is either what would get under old State Pension rules, or the amount they would get if the new state pension rules were in place at the start of their working life, whichever is higher.
If their starting amount is less than the new State Pension, they can top it up until they reach the full amount or State Pension age, whichever is first. Currently, each year adds around £5.13 a week to the state pension pay out.
The full New State Pension is £179.60 per week, currently, although that will change every year with inflation. So if you retire in 2050 you're not going to be stuck with a £179.60 a week payment if that amount is worth less in 2050 than today.
Those who reached working age after April 2016 will have their pensions calculated completely under the new rules. They will need to have a National Insurance record for 10 years to get any, and 35 for the full amount, although that could change in the years before you retire.
How to qualify for National Insurance payments through work or benefits
To qualify for a State Pension, you need at least 10 years on your National Insurance (NI) record. To get that, you can be working and paying NI contributions; getting NI credits by being unemployed, ill, or a parent or carer; or paying voluntary NI contributions.
In general, the longer you put in for, the more you'll get, up to the maximum rate.
You can get NI credits for claiming child benefit, Jobseeker's Allowance or Employment Support Allowance.
What is the State Pension age?
You have to be 66 to claim the state pension, but that will rise to 67 for those born after April 1960, and to 68 for those born after April 1977. It is likely to rise again, as the DWP is reviewing the state pension age. You can check yours here: https://www.gov.uk/state-pension-age
How can I find out how much I'll get in my State Pension?
You can check your state pension forecast here: https://www.gov.uk/check-state-pension.You will need a Government Gateway or Gov.uk verify account to do so.
