Many older state pensioners in the UK are receiving up to £2,797 less per year in retirement income compared to those on the new State Pension scheme.
The Department for Work and Pensions (DWP) oversees two systems – the basic State Pension and the new State Pension – and your entitlement depends on when you reached retirement age.
Who Qualifies for Each Pension?
- Basic State Pension:
- For men born before 6 April 1951 and women born before 6 April 1953.
- Full entitlement is currently £176.45 per week.
- New State Pension:
- For men and women born after these dates.
- Full entitlement is £230.25 per week, which is £53.80 more weekly than the basic scheme.
This difference adds up significantly over a year.
Annual Comparison of Pension Payments
| Pension Scheme | Weekly Full Rate | Annual Total | Difference |
|---|---|---|---|
| Basic State Pension | £176.45 | £9,175.40 | – |
| New State Pension | £230.25 | £11,973.00 | £2,797.60 more |
More than 8.57 million pensioners currently receive the basic State Pension, compared to 4.38 million on the new scheme. This means the majority of older pensioners are missing out on thousands annually.
National Insurance Records and Eligibility
The amount you receive depends on your National Insurance (NI) record:
- Basic State Pension:
- Men (born 1945–1951): 30 qualifying years
- Men (born before 1945): 44 years
- Women (born 1950–1953): 30 years
- Women (born before 1950): 39 years
- New State Pension:
- Minimum of 10 qualifying years to receive payments.
- 35 qualifying years typically needed for the full amount.
If your weekly payments are below the maximum, it indicates insufficient NI contributions.
Annual Increases Under the Triple Lock
Both schemes rise annually on 6 April under the Triple Lock system, which ensures pensions increase in line with inflation, average earnings, or 2.5% (whichever is highest).
For 2024/25:
- Basic State Pension increased by £360 per year (from £169.50 to £176.45 per week).
- New State Pension increased by £470 per year (from £221.20 to £230.25 per week).
Despite these uplifts, older pensioners remain at a disadvantage.
The State Pension gap highlights a significant inequality between older and younger retirees. While the Triple Lock ensures annual increases, pensioners on the basic scheme are still £2,797 worse off each year compared to those on the new scheme.
With millions still relying on the basic State Pension, this disparity continues to affect the financial stability of older generations.
FAQs
It depends on whether you qualify for the basic or new State Pension, which is determined by your date of birth and National Insurance record.
No. Your entitlement is fixed by your retirement age and the rules in place when you became eligible.
You need at least 10 qualifying years for the new State Pension and around 30–44 years for the full basic State Pension, depending on your birth year.