The State Pension system is split into two schemes which are both paid at different rates.
State pensioners born before certain dates will get up to £2,797 less per year in State Pension payments compared to other retirees.
The UK’s State Pension system is split into two separate schemes – basic and new – and each of these are paid at different rates. Men born before April 6, 1951, and women born before April 6, 1953, receive the basic State Pension, which is worth up to £176.45 per week under the new rates from April 2025 if you get the full amount. But those who are born on or after these dates get significantly more money.
If you receive the new State Pension, the full rate is worth up to £230.25 per week – £53.80 more than those who get the full basic State Pension.
State Pension rates increase at the start of every new tax year on April 6 and this year both schemes were uprated by 4.1%, in line with the annual increase in the average weekly earnings index for May to July 2024. This increase means that those who get the new State Pension will get up to £470 extra per year if they get the full rate, but those on the basic State Pension will only be up to £360 per year better off – £110 less.
Over the course of a year, those on the full new basic rate will get £9,175.40 in pension payments from April 7 – but this amounts to a huge £2,797.60 less per year than those getting the full new State Pension for a year.
According to UK Parliament, an estimated 8.57 million pensioners were claiming the basic State Pension in the 2024/25 tax year, while only 4.38 million were new State Pension claimants. As the vast majority of pensioners get the basic State Pension, it means up to 8.57 million are missing out on up to £2,797.60 per year, compared to retirees on the new scheme.
But age isn’t the only factor in determining which State Pension you get, with everyone who is eligible for the basic State Pension having already reached State Pension age, but how much money you get depends on your national insurance record.
To get the full basic State Pension, men usually need 30 qualifying National Insurance years if you were born between 1945 and 1951, or 44 qualifying years if you were born before 1945. By comparison, women usually need 30 qualifying years if you were born between 1950 and 1953, or 39 qualifying years if you were born before 1950. So if you get less than £176.50 per week then it means you have less than the full number of qualifying years.
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Similarly, if you’re on the new State Pension and get less than £230.25 per week then you might need more National Insurance qualifying years to boost your weekly payments. You need at least 10 qualifying years on your National Insurance record to get any new State Pension and you usually need 35 qualifying years to get the full amount.
The DWP said: “With uprating in effect, pensioners receiving the full basic State Pension will see their weekly payments rise from £169.50 to £176.45 per week, worth an additional £360 a year. In addition, the full rate of the new State Pension will increase from £221.20 to £230.25 per week, an increase of £470 a year.”
Minister for Pensions Torsten Bell added: “Raising the State Pension and rescuing the NHS – these are this government’s priorities to give all pensioners the dignity they deserve in their retirement. Those who have worked hard throughout their lives, paying into the system, are owed nothing less.
“We’re improving the lives of millions of pensioners through our £7.84 billion additional funding for the State Pension this year. That means up to £470 extra in pensioners’ pockets from this week and comes alongside our work to boost Pension Credit uptake, and the £26 billion we’ve invested in the NHS that has seen waiting lists in England fall for 5 months in a row.”
