Recent data released by the Department for Work and Pensions (DWP) has shed light on some interesting trends in state pension benefits. A closer look at the numbers reveals that not everyone is entitled to the new state pension, and even fewer qualify for the maximum amount.
Not Everyone Gets the New State Pension
As of May 2024, a total of 12.9 million people received the state pension, which represents a significant increase of 220,000 compared to the previous year. However, it’s essential to remember that this is not representative of all state pension recipients.
- Only 1 in 3 receive the new system: Less than a third (4.1 million) of state pension recipients are on the new system, which means it will take several years for the balance to tip towards the new system becoming the norm.
- Basic State Pension still prevalent: The basic state pension remains the most common type of state pension, with millions of people relying on this income in retirement.
Not Everyone Gets the Full Amount
Another crucial aspect is that not everyone qualifies for the full amount under the new state pension. In fact, the average payment under the new system is currently £207.53 per week, which is lower than the maximum available (£221.20 per week).
- Basic State Pension averages: The average payment for someone receiving the basic state pension is slightly lower at £198.88 per week.
- Pension credit threshold: Both of these average figures are below the qualifying threshold for pension credit, which currently tops up pensioner incomes to £218.15 for a single person or £332.95 for couples.
You May Qualify for Pension Credit
If you’re relying solely on state pension for your retirement income, you may be eligible for pension credit. This valuable benefit not only tops up your income but also serves as a gateway to other support, such as:
- Council tax relief: Help with council tax bills
- NHS costs: Assistance with NHS prescriptions and appointments
- Free TV licence: Eligibility for a free TV licence for the over 75s
You Can Get the Winter Fuel Payment if You’re on Pension Credit
If you make a claim by 21 December, assuming it’s successful, you’ll also qualify for a winter fuel payment this year. This could have a significant impact on your standard of living.
Women Closing in on Parity with Men on State Pension
The data also highlights the narrowing gender pension gap when it comes to state pension. While women still lag behind men, the average weekly income is now £209.49 for men and £205 for women.
- Basic State Pension system: The gap is more pronounced in the basic state pension system, with women receiving an average of £186.03 per week compared to £217.25 for men.
- Progress towards parity: Despite still having some way to go, it’s encouraging to see women closing in on parity with men in this area.
By understanding these trends and facts, you can make informed decisions about your retirement income and potentially unlock additional benefits to support your standard of living.