Thousands of state pensioners receive less than £100 a week

Pension: Claer Barrett shares tips to maximise your state pension

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The amount of basic or new state pension a person receives depends on how many years of National Insurance contributions or credits they have accrued. Payments will increase in April with the start of the new financial year when they will go up by 10.1 percent, as announced in the Autumn Statement.

The basic state pension applies to men born before April 6, 1951 and women born before April 6, 1953. Those born after these dates will receive the new state pension.

The full new state pension is currently £185.15 a week while the basic state pension is £141.85 a week.

A person typically needs 30 years of National Insurance contributions to get the full basic state pension and 35 years of contributions to get the full new state pension.

Those who are not paying in contributions may be able to get credits to go towards their state pension, such as those on benefits or who are ill.

There is a tool on the Government website for a person to check their National Insurance record and see if there are any gaps in their contributions.

A person can voluntarily pay contributions to fill a gap in their record. An individual may want to do this as they are approaching state pension age and they do not have enough contributions for the full amount.

A person may also choose to do this if they know they will not be able to get the full qualifying years during their working life.

Those who receive the state pension are usually paid every four weeks in arrears and a person has to apply to receive it once they reach state pension age, which is currently 66 for both men and women.

In April, state pension payments will increase by 10.1 percent, as the triple lock policy has been reinstated.

This means the full basic state pension will increase to £156.20 while those on the full new state pension will receive £203.85 a week.

The triple lock policy guarantees the state pension increases in line with the highest of 2.5 percent, the rise in average earnings and the rate of inflation.

The average earnings element was suspended last year after a distorted rise in earnings after the coronavirus pandemic, with payments increasing by just 3.1 percent.

Research from the Pensions and Lifetime Savings Association warned the upcoming pensions increase will not meet the “basic standard of living” in the UK.

The Pension and Lifetime Savings Association recently updated its Retirement Living Standards to factor in inflation and the rising cost of living.

The association found that the minimum lifestyle required for pensioners to live happily has increased by 18 percent.

The figure has gone up from £10,900 a year to £12,800 for a single person and jumped by 19 percent from £16,700 to £19,900 for couples.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, suggested what pensioners can do to boost their income.

She explained: “It shows the hugely important role workplace pensions have to play in safeguarding peoples’ retirement resilience.

“The new state pension – due to rise to £10,600 [a year] from April – does not cover even a basic standard of living for a single pensioner, so further savings are important to help them meet their day-to-day costs.

“If you are in a couple, then the new state pension gives you enough for a basic standard of living though it’s worth saying if they are older pensioners on the basic state pension then they could still have a shortfall.”

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