Only half of people claiming the new state pension, which was introduced in April 2016, are receiving the full amount, according to government data analysed by later life mortgage broker Responsible Life.
This compares with almost three quarters (74 per cent) of people who are claiming the old basic state pension who receive at least the full rate.
A Freedom of Information request by Responsible Life to the Department for Work and Pensions (DWP), found that of the estimated 3,057,000 people receiving the new state pension in November 2022, 649,000 women, and 881,000 men received less than £185.15.
The FOI asked DWP to confirm how many people in the UK are receiving the full new state pension and basic state pension.
The DWP provided the latest available data covering people receiving a state pension in November 2022, when the new full state pension was £185.15 a week.
The current weekly pension for 2023-24 is now £203.85.
Steve Wilkie, executive chairperson of Responsible Life, said: “These figures from the DWP show a much higher percentage of people who have claimed their state pensions since April 2016 are not receiving the full amount, compared to those pre-2016, under the old state pension system.
“The state pension makes an important contribution to most peoples’ finances in retirement, and knowing how much they’ll receive is crucial when planning for the future.”
The following table shows the estimated number of people receiving the new state pension, November 2022.
| No. of females | No. of males | Total |
Received at least £185.15 | 594,000 | 934,000 | 1,528,000 |
Received less than £185.15 | 649,000 | 881,000 | 1,529,000 |
Total in receipt of state pension | 1,243,000 | 1,814,000 | 3,057,000 |
Source: DWP
Under the old, pre-2016, system, of the 9,576,000 people receiving the basic state pension in November 2022, 26 per cent received less than the full amount of £141.85.
The following table shows the estimated number of people receiving the old basic state pension, November 2022.
| No. of females | No. of males | Total |
Received at least £141.85 | 3,622,000 | 3,488,000 | 7,109,000 |
Received less than £141.85 | 1,968,000 | 498,000 | 2,466,000 |
Total in receipt of state pension | 5,590,000 | 3,986,000 | 9,576,000 |
Source: DWP
Wilkie said the state pension changes made by the government, creating a ‘single tier’ pension, were designed to make things simpler, “but that doesn’t appear to be the case on this evidence”.
“These figures suggest there is a knowledge and information gap around the state pension, and people overestimate how much they think they’re going to receive because they don’t understand how the contributory benefit is calculated,” he said.
“To avoid people retiring and facing the shock of a smaller state pension that they were expecting, more needs to be done to raise awareness of the importance of checking what you’re likely to receive before you reach retirement age, and taking the necessary steps if the figure is less than anticipated.”
The new state pension was introduced on April 6, 2016.
Men born on or after April 6, 1951 can claim the new state pension or women born on or after April 6, 1953.
If an individual reached SPA before April 6, 2016, the old rules apply.
The current retirement age in the UK for the state pension is currently 66 for both men and women.
The DWP has been approached for comment.
sonia.rach@ft.com
What's your view?
Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com
