New figures released by the Department for Work and Pensions (DWP) show that at the end of August 2022 there were 12.6 million across Great Britain in receipt of State Pension payments, an increase of 130,000 on the year before.
The statistics released earlier this week also show that there are now 2.9 million people receiving the New State Pension, an increase of 670,000 since 2022. Even though the contributory benefit is worth up to £185.15 each week, the average weekly payment was £165.58, an increase of £6.47 since August 2021.
The number of older people on the Basic State Pension is now 9.7 million, this payment is worth up to £141.85 each week. However, pensions expert Helen Morrissey warns that there are 1.8 million pensioners receiving less than £100 per week from their State Pension.
Women received on average £155.24 per week in State Pension payments, compared to £177.78 for men, which may be due to a shortfall in National Insurance contributions - you need a minimum of 10 years’ worth for any State Pension Payment and 35 for the maximum.
You can currently buy National Insurance credits to plug gaps going back to 2006, however, from the start of the new financial year on April 6, this window closes, and you can only go back six tax years - find out more here.
Commenting on the new figures, Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “State Pension incomes continue to climb with women retiring under the new state pension system being the major beneficiaries. The average amount of new state pension claimed by women is £170.52 compared to just £152.12 for a woman claiming the Basic State Pension - it is an enormous gap that makes a huge difference to women’s retirement prospects.
“It has also allowed women to significantly close the gender gap, although this isn’t all good news, because the increase for women has been accompanied by a cut for men - who claim an average of £175.84 in New State Pension per week compared to £178.60 under the basic system.
“The playing field is levelling off though it’s important to add that not everyone gets a full State Pension and there are still 1.8m people receiving less than £100 per week.”
Ms Morrissey explained: “Many people receive less due to gaps in their employment record. If you do have gaps, then it’s worth checking with DWP as you may be able to claim benefits for these time periods that come with a voluntary National Insurance credit.”
If you can afford it, you can also buy National Insurance credits - a full year costs around £800 and for each year bought you get 1/35th of a year’s State Pension - around £275.
This means you effectively earn your money back in around three years so it can prove very good value.
The pensions expert said: “If you’re a man born after 5 April 1951, or a woman born after 5 April 1953 you can currently plug gaps in your National Insurance record going back to 2006 but this window is rapidly closing and from 6 April you will be restricted to plugging gaps from the last six tax years only.”
However, she warned that it is “really important to check that it is worth your while paying for these credits” so always check with DWP before doing so.
She also advised those on lower incomes to claim all they are entitled to.
There were 44,000 fewer recipients of Pension Credit compared to the same period last year which could be down to more people retiring under the New State Pension system but Ms Morrissey said it’s clear there are still “many people out there who could be receiving this valuable benefit who aren’t”.
The DWP launched a Pension Credit awareness campaign in April last year, which will continue this year, but the new figures only chart back to August and by Minister for Employment, Guy Opperman recently told MPs that in December, DWP had seen a 177 per cent take-up in the benefit.
In addition to topping up the income of the poorest pensioners by up to £3,500 a year on average, it acts as a valuable gateway to other important benefits - most notably the £900 means-tested cost of living payment from the UK Government.
Older people can check their eligibility for Pension Credit using the online calculator here or by calling the Pension Credit helpline on 0800 99 1234.
To keep up to date with the latest State Pension news, join our Money Saving Scotland Facebook page here, or subscribe to our newsletter which goes out daily, Monday to Friday - sign up here.
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