Analysis reveals that many individuals are receiving far below the full state pension amount, with some getting as little as £10 per week.

An alarming number of people receiving the new state pension are getting far less than the full weekly amount, with an analysis by Royal London revealing that around 150,000 pensioners are receiving under £100 a week. This data, compiled from the Department for Work and Pensions (DWP) figures from spring 2023, highlights that many individuals are not receiving the full state pension despite being eligible.

Out of the 3.4 million people receiving the new state pension, only 1.7 million individuals are getting the full £221.20 per week, which is the state pension amount for 2024/25. The full amount increased from £203.85 the previous year. Many pensioners have fewer than the required 35 years of National Insurance contributions (NICs) to qualify for the full pension. Those with fewer years of NICs will receive a reduced amount, based on how many qualifying years they have.

A concerning figure from the analysis shows that 149,317 pensioners receiving the new state pension, particularly those who reached the state pension age after April 2016, are receiving less than £100 a week. Additionally, there are 17,546 pensioners whose weekly pension is under £20, with 5,677 of them receiving less than £10 a week.

The new state pension system, introduced in 2016, aims to provide a clearer and more sustainable foundation for retirement savings, allowing people to build on private pensions. However, Royal London’s study reveals a significant issue, as many individuals are left without sufficient income in their retirement.

A prior survey conducted by Royal London revealed that approximately one in five people aged 66 and above were solely dependent on the state pension. On a positive note, low-income pensioners may be eligible for pension credit, which could provide up to an additional £3,900 annually. The DWP has recently launched a campaign to raise awareness about this support, urging those who qualify to claim.

In addition to pension credit, individuals with gaps in their National Insurance records can make additional contributions to increase their state pension entitlement. However, many pensioners may not realise they have gaps in their records until it’s too late to correct them. These gaps could have arisen due to periods of low earnings, unemployment without claiming benefits, or working abroad.

The DWP encourages those on the lowest incomes to apply for pension credit, a benefit that can help fill the financial gap for pensioners struggling with low incomes. Furthermore, individuals with gaps in their National Insurance records due to certain life circumstances, such as caring for a child under 12 or caring for someone receiving specific benefits, may qualify for free National Insurance credits to fill these gaps.

It is crucial for pensioners to regularly check their National Insurance contribution records and ensure they are receiving the correct amount of state pension. Individuals can request a state pension forecast to assess any gaps in their contributions and make the necessary arrangements to address them.

The deadline for paying voluntary National Insurance contributions to fill gaps for the years between April 2006 and April 2018 is fast approaching, with the final date set for 5 April 2025. After this, only the last six years’ worth of contributions can be retroactively made.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, advises pensioners to check their records and plan for any gaps to avoid missing out on the full pension entitlement.