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Many state pensioners are facing what experts describe as a looming “disaster” as their weekly payments drop below £20. New findings reveal that a large share of retirees are receiving only a fraction of their full entitlement from the Department for Work and Pensions (DWP).
Only Half Receive the Full New State Pension
According to data obtained by Royal London, just half of the 3.5 million people on the new State Pension are being paid the full weekly amount. The figures highlight stark inequalities, with over 17,000 retirees living on less than £20 a week.
Why Are Payments So Low?
Royal London is urging pensioners to check their State Pension forecast online to identify potential gaps in their National Insurance record. Missing contributions can significantly reduce the final pension amount.
This warning comes amid rising speculation that the new Labour government could increase the State Pension age, raising fresh concerns for those nearing retirement.
State Pension Age Changes and Risks
Neil Rayner, Head of Advice at financial firm True Potential, explained how shifting government policies have repeatedly altered retirement expectations.
- Current law states the State Pension age will increase to 68 by 2044.
- In 2011, many women were caught off guard when a rule change increased their retirement age by five years.
- In 2014, the rise to 67 was brought forward by nearly a decade, moving the change to 2026–2028 instead of 2034–2036.
Given this history, Mr. Rayner cautioned that the State Pension age could reach 70 before 2050.
Who Can Claim the New State Pension?
- Men born on or after April 6, 1951
- Women born on or after April 6, 1953
The current State Pension age stands at 66 for both men and women.
The Triple Lock Guarantee
Each April, the value of the new State Pension rises in line with the triple lock system. This mechanism ensures payments increase with the highest of inflation, average wage growth, or 2.5%, aiming to protect pensioners’ income against rising living costs.
The latest figures expose a troubling reality: thousands of UK pensioners are receiving shockingly low weekly payments, with some struggling on less than £20 per week.
With the possibility of further State Pension age hikes, experts strongly advise retirees and those approaching retirement to review their pension forecast and National Insurance record to avoid unexpected shortfalls. Ensuring awareness now could prevent devastating financial hardship in the future.
FAQs
This often happens due to gaps in National Insurance contributions, which lower the overall pension entitlement.
The State Pension age is currently 66 for both men and women. However, it is scheduled to rise in the coming decades.
The triple lock ensures annual increases to the State Pension, based on the highest of inflation, wage growth, or 2.5%, helping pensions keep pace with living costs.