State pensioners in the UK may be missing out on a significant amount of money in State Pension payments, with some eligible for £11,973 more per year depending on their birthdate.
The UK State Pension system is divided into two schemes: the basic State Pension and the new State Pension.
The amount you receive in retirement depends on which pension scheme you’re eligible for, which is determined by your birthdate.
Eligibility for Basic vs. New State Pension
The eligibility for each pension scheme is based on your birthdate:
- Basic State Pension: If you were born before April 6, 1951 (for men) or before April 6, 1953 (for women), you qualify for the basic State Pension. This scheme currently provides £176.40 per week if you qualify for the full amount.
- New State Pension: For those born on or after April 6, 1951 (for men) or April 6, 1953 (for women), the new State Pension applies. This scheme offers a full rate of £230.25 per week.
As a result, those on the new scheme are receiving up to £53.80 more per week compared to those on the basic State Pension.
State Pension Increase for the 2024/25 Tax Year
Each tax year, the State Pension is adjusted based on the increase in the average weekly earnings index from May to July. For the 2024/25 tax year, the pension has been uprated by 4.1%, increasing the amounts as follows:
- New State Pension: The full rate has increased from £221.20 to £230.25 per week. This means pensioners will now receive an additional £470 per year.
- Basic State Pension: The full rate has risen from £169.50 to £176.45 per week, giving pensioners an extra £360 annually.
Annual Impact of the State Pension Increase
With the uprating, those on the new State Pension will receive £11,973 per year in total, an increase of £470 compared to the previous year’s rates.
On the other hand, basic State Pension recipients will receive £9,175.40 annually, which is £2,979 less than those on the new State Pension.
How Many Pensioners Are Affected?
According to data from the UK Parliament, an estimated 8.57 million pensioners are claiming the basic State Pension in the 2024/25 tax year. Meanwhile, 4.38 million are claiming the new State Pension.
This means that nearly 9 million pensioners are receiving significantly lower payments under the old basic pension scheme, potentially missing out on the £11,973 available to those on the new scheme.
Statements from the Department for Work and Pensions (DWP)
The DWP confirmed that pensioners and those receiving other uprated benefits will see an increase in their next payment after Monday, April 7. The increase will be as follows:
- The full basic State Pension will rise from £169.50 to £176.45 per week, amounting to an additional £360 per year.
- The new State Pension will increase from £221.20 to £230.25 per week, adding £470 to annual payments.
Government Funding for State Pension Increases
Minister for Pensions Torsten Bell highlighted the government’s commitment to improving the lives of pensioners, noting that £7.84 billion has been allocated in additional funding for the State Pension this year. This funding ensures that pensioners receive up to £470 more in their payments.
This increase comes as part of broader government efforts to boost the uptake of Pension Credit and provide additional funding to the NHS, helping reduce waiting lists in England.
2024/25 State Pension Rates
| Pension Scheme | Previous Weekly Rate | New Weekly Rate | Annual Increase | Total Annual Payments |
|---|---|---|---|---|
| Basic State Pension | £169.50 | £176.45 | £360 | £9,175.40 |
| New State Pension | £221.20 | £230.25 | £470 | £11,973 |
The increase in the State Pension for the 2024/25 tax year offers significant financial relief for retirees, particularly those on the new State Pension. However, millions of pensioners on the old basic scheme are still missing out on substantial payments.
The government’s ongoing efforts to ensure pensioners’ well-being are critical to addressing this disparity and providing greater financial support for those in retirement.
FAQs
What is the difference between the basic and new State Pension?
The basic State Pension applies to those born before April 6, 1951 (men) or April 6, 1953 (women), and offers a weekly rate of up to £176.40. The new State Pension applies to those born after these dates and provides a higher rate of up to £230.25 per week.
How much will the State Pension increase in 2024/25?
The State Pension will increase by 4.1% for the 2024/25 tax year, which means a £470 increase for new State Pension claimants and a £360 increase for basic State Pension claimants.
Can I receive the new State Pension if I was born before 1953?
No, individuals born before April 6, 1951 (men) or April 6, 1953 (women) are eligible for the basic State Pension, not the new scheme.