The National Pension is a public pension system that all residents of Japan between the ages of 20 and 60 are required to join.
Centered around the “Basic Old-Age Pension” that supports life in retirement, it also includes coverage for disability and survivors, functioning as the minimum social security to prepare for life’s risks.
Participants are broadly divided into three categories.
- Category 1 Insured Persons: Self-employed individuals, freelancers, students, unemployed persons, etc.
- Category 2 Insured Persons: Company employees, public servants (enrolled in the Employees’ Pension Insurance)
- Category 3 Insured Persons: Spouses dependent on Category 2 Insured Persons (full-time homemakers)
National Pension Insurance Premiums and Payment Methods
The monthly National Pension Insurance premium for fiscal year 2026 is ¥16,980.
Multiple payment methods are available. Utilizing the advance payment system in particular offers a discount, reducing the long-term burden.
The main payment methods are as follows:
- Direct debit
- Credit card payment
- 6-month, 1-year, or 2-year prepayment (discounts available)
Prepayment offers particularly large discounts and is popular as the most economical payment method.
Annual Pension Amount Receivable from National Pension
The full amount of the Basic Old-Age Pension is approximately ¥820,000 per year (projected for fiscal year 2026).
To receive the full amount, 40 years (480 months) of premium payments are required. If the payment period is shorter, the benefit amount is reduced proportionally.
The pension amount is determined by the following formula:
Full Amount × Number of Months Paid ÷ 480
Having unpaid periods directly impacts your future benefit amount, making it crucial to manage your payment status.
Benefits of the National Pension
The National Pension offers fairness, as all citizens receive the same basic pension.
It also provides coverage not only for old age but also for disability and survivor benefits, making it a key feature for preparing against a wide range of risks
Furthermore, exemption and deferral systems are available for those with low income and students.
- Full Exemption
- Partial Exemption
- Student Payment Special Provision
- Young Person Payment Deferral
These systems make it easier to enroll even in difficult financial circumstances.
Disadvantages and Considerations of the National Pension
On the other hand, the National Pension alone is not sufficient to cover living expenses in retirement.
The full amount of the Basic Old-Age Pension is insufficient to cover living expenses, and many people need to build additional assets.
Furthermore, non-payment of premiums carries the following risks:
- Future benefit amounts will decrease
- You may lose eligibility for the Basic Disability Pension or Basic Survivor’s Pension
Failure to pay premiums carries significant disadvantages, making early action crucial.
Ways to Make Better Use of National Pension
To utilize the National Pension wisely, taking advantage of discount and supplement systems is effective.
Representative methods are as follows:
- Save on premiums with the prepayment system
- Increase your future benefits with the ¥400 monthly supplementary pension
- Boost your retirement income with the National Pension Fund
- Strengthen your retirement savings by combining with iDeCo and NISA
Combining these significantly enhances your sense of security in retirement.
Frequently Asked Questions
If you do not pay National Pension premiums, not only will your future pension amount decrease, but you may also lose eligibility for disability and survivor benefits.
Students are also required to enroll, but they can defer premium payments by utilizing the Student Premium Payment Deferral System.
Additionally, if your payment period is insufficient after age 60, you can voluntarily enroll to increase your benefit amount.
Summary
The National Pension is a vital system designed to safeguard a minimum standard of living in old age or in case of unforeseen circumstances.
However, the basic old-age pension alone often falls short as living expenses. Therefore, combining it with supplementary pensions, the National Pension Fund, iDeCo, and other options to prepare retirement funds is a practical choice.
Understanding the system correctly and utilizing it wisely will lead to greater peace of mind for the future.
