National Insurance and State Pensions

6. Entitlements

Paying NICs entitles you to certain benefits.

6.1 You are currently entitled to a full basic state pension of £110.15 a week if you have accrued 30 years’ NICs or credits.

  • The state pension is reduced if you make fewer contributions.
  • Employees can apply to the Pension Service for a pension forecast at https://secure.thepensionservice.gov.uk/statepensionsforecast/ or complete a BR19 form.
  • The pension age will be equalised for men and women from 2020.
  • There is no default retirement age (DRA) and employers can no longer compulsorily retire employees.

6.2 You are entitled to the State Second Pension if you have paid any Class 1 NICs since April 1978.

  • The pension will depend on the amount of contributions made.
  • The maximum is 20% of earnings between the upper and lower earnings limit.

6.3 You are entitled to statutory sick pay (SSP) if you earn £109 or more per week. SSP is currently £86.70 a week.

  • Employers can opt out providing they pay at least £86.70 a week.
  • Many employers maintain full pay.

6.4 You are entitled to statutory maternity pay (SMP), if you meet certain conditions.

  • You need to have been continuously employed for 26 weeks and paid Class 1 NICs on earnings over £109 a week for the eight weeks up to the 15th week before the baby is due.
  • You receive 90% of your average weekly earnings for the first six weeks and
  • £136.78 a week (or 90% of your average earnings if lower) for the remaining 33 weeks.Many employers pay more than this statutory minimum.
  • Employers can recover 92% of the SMP paid to their employees.Employers who pay less than £40,000 Class 1 NICs a year get Small Employer’s Relief. This recovers 100% of SMP and an additional 4.5%.

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