Pension planning for the self-employed

The basic State Pension

The basic State Pension is based on your National Insurance contributions (NICs). You normally get the full State Pension if you have paid NICs for most of your working life (44 years for men, or women who have a State Pension age of 65; 39 if you have a State Pension age of 60). If you have not paid, been treated as paid or credited with sufficient NICs, your State Pension may be reduced. The full basic state pension for 2005/06 is £82.05 per week.

How much basic State Pension will I get when I reach State Pension age?
To get an estimate of how much State Pension you will get when you reach State Pension age you can apply for a State Pension Forecast. Get a state pension forecast on the Pension Service website.

State pension age
Until now, the earliest age for drawing your State Pension has been 65 for men and 60 for women. However, changes are being brought in to make it 65 for both men and women by 2020.

Women born on or before 5 April 1950 will still be able to draw their State Pension at 60. Women born on or after 6 April 1955 will have to wait until they are 65. Women born between those dates will have a State Pension age between 60 and 65 that will depend on their date of birth. The change to the State Pension age for women will be phased in from 6 April 2010, over a period of ten years. For more information, download a guide to state pensions from the DWP website (PDF).

Subjects covered in this guide

• Introduction
• Assessing your pension needs
• How a personal pension works
• The basic State Pension
• Stakeholder pension
• The difference between a stakeholder pension plan and a personal pension plan
• Other pension products
• Other tax-efficient savings
• Transferring your pension
• Keeping track of your pension

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