The state pension has no fund. There is no pot. Today's workers pay today's pensioners — and hope the next generation does the same for them. Enter your age and salary to see what that actually means for you.
Data updated April 2026 · Sources: ONS, OBR, HMRC, GOV.UK
How does the state pension actually work? It's a pay-as-you-go system. Your National Insurance contributions don't go into a personal pot — they pay for the pensions of people who are retired right now. When you retire, you'll depend on the next generation's NI contributions to pay yours.
The National Insurance Fund had a balance of £78.2 billion at March 2025 — enough to cover about 7 months of pension payments. That's the buffer. After that, it relies entirely on incoming NI from current workers.
The triple lock guarantees pensions rise by the highest of earnings growth, CPI inflation, or 2.5% each year. It was introduced in 2010 and has already been suspended once (2022-23). The OBR says it is "unsustainable" long-term. It costs £15.5 billion/year more than earnings-only indexation.
You need 35 qualifying years of NI contributions for a full state pension (£241.30/week in 2026-27 = £12,548/year). With 10 years you get the minimum. Below 10, you get nothing.
State pension age: GOV.UK State Pension Age timetable. Rise from 66 to 67 underway (April 2026 – March 2028). Rise to 68 legislated for 2044-2046 (Pensions Act 2007). Government intention: 2037-2039 (Cridland Review 2017). 2023 Review recommended 2041-2043. Projections beyond 68 based on OBR Fiscal Risks and Sustainability July 2025 and ILCUK dependency ratio modelling.
State pension amount: GOV.UK. Full new state pension: £230.25/week (2025-26), £241.30/week (2026-27). Annual: £12,547.60. Requires 35 qualifying NI years. Minimum 10 years.
NI contributions: HMRC rates 2025-26. Employee: 8% on earnings £12,570–£50,270, 2% above. Employer: 15% above £5,000. Total NI receipts 2023-24: ~£178bn (HMRC tax receipts bulletin).
Demographics: ONS population projections (2022-based). Old-age dependency ratios from ONS. Life expectancy at 65 from ONS National Life Tables. ILCUK research on SPA and dependency ratios.
Costs: OBR welfare spending forecasts. State pension spending ~5.1% of GDP (2024-25), projected 6.4% by 2050, 7.7-8.1% by early 2070s.
Triple lock: House of Commons Library research briefing CBP-7812. OBR cost estimates. Suspended 2022-23 under Social Security (Uprating of Benefits) Act 2021.
National Insurance Fund: NIF Accounts 2024-25. Balance: £78.2bn at March 2025. Pay-as-you-go operation confirmed by House of Commons Library research briefing CBP-4517.
Private pension comparison: Assumes 5% real annual return (net of fees), based on long-run UK equity returns. 4% drawdown rate in retirement. This is illustrative — actual returns vary and past performance doesn't guarantee future results.
Generational comparison: SPA by birth year from legislated timetable. Life expectancy at SPA from ONS/IFS. Working years assumed from age 22 (post-education). Pension years = life expectancy at SPA.
Disclaimer: This tool shows what the current rules and projections imply for your pension. The government can change the rules at any time — and has done so repeatedly. Nothing here is financial advice. If you're worried about your retirement, speak to a qualified financial adviser.
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