The lowest state pension amount revealed – how to avoid it and boost your pot for free
TEN unfortunate pensioners received just 52p in state pension last year, which is not enough for even a pint of milk.
These retirees were given just 1p a week in the year to May 2023, The Sun can exclusively reveal.
The shocking figures were part of a Freedom of Information request we submitted.
In comparison, a pensioner who received the full new state pension would have been given £203.85 a week.
This is £203.33 more than the pitiful sum their peers were handed.
So how have these out-of-luck pensioners received such a small sum?
Here we explain how it could have happened – and how you can avoid being caught out too.
How does the new state pension work?
The state pension is a monthly payment from the government to most people once they reach the age of 66.
Retirees on the new state pension currently get up to £221.20 a week, or £11,502.40 a year.
Under the triple lock, the state pension increases every year in line with inflation, wages or 2.5%, whichever is highest.
The amount of state pension you get depends on your National Insurance record, so not everyone will get the same amount.
You need 35 qualifying years of National Insurance contributions to get the maximum amount of new state pension.
You make these contributions when you pay National Insurance while working.
You need ten qualifying years on your National Insurance record to get any state pension.
This is one of the ways these ten retirees may have missed out on higher state pension payments.
You may have gaps in your National Insurance record if you were:
- Employed with low earnings
- Living or working outside the UK
- Self-employed but not making any contributions because of small profits
- Unemployed and not claiming benefits
What is National Insurance?
NATIONAL Insurance is a tax on your earnings, or profits if you're self-employed.
These contributions make you eligible for things like the state pension and certain benefits.
You’ll usually pay National Insurance Contributions (NICs) when you’re over the age of 16 and earning a certain amount.
For example, if you earn £1,000 a week, you pay nothing on the first £242.
Earn over that and you pay 10% on the next £725 – so £72.50. Then you pay 2%o on the rest, so £33, which works out as 66p.
For the self-employed rates are slightly different.
You can also get something known as National Insurance in some circumstances when you’re not working, for example when you have kids and claim certain benefits.
NICs are usually taken automatically by your employer and paid to HMRC, so you don’t need to do anything.
You can see how much NICs you pay on your wage slip.
Anyone working for themselves usually has to pay NICs themselves when completing a self-assessment tax return.
The ten pensioners may also have missed out because they have not claimed National Insurance credits.
These credits are given to people who are not paying National Insurance.
There are many reasons why you can get them, including if you are looking for work, ill or on maternity pay.
Credits help to fill gaps in your National Insurance record, which can increase the amount of state pension you get.
Jon Greer, head of retirement policy at Quilter, said: “To ensure you receive the full State Pension, it’s important to check your National Insurance record.
“Make sure to claim any National Insurance credits you’re entitled to, which can be awarded if you were a carer, unemployed, or receiving certain benefits.”
Some credits are paid automatically but others you need to claim for.
You can check your National Insurance record and see if you are missing any credits on the GOV.UK website.
How does the old state pension work?
The old state pension is paid to people who reached state pension age before April 6, 2016.
It is paid to men who were born before April 6, 1951 and women born before April 6, 1953.
Almost three-quarters of pensioners receive the old state pension, according to the Department for Work and Pensions (DWP).
It pays £169.50 a week, or £8,814 each year.
The amount you get is also dependent on your National Insurance record.
The number of years you need to qualify for the full payment depends on your gender and when you were born.
If you are a man who was born between 1945 and 1951 then you need 30 qualifying years of contributions.
But if you were born before 1945 then you must have 44 qualifying years.
Meanwhile, if you are a woman then you usually need 30 qualifying years if you were born between 1950 and 1953.
Women born before 1950 need 39 qualifying years.
If you have fewer than the full number of qualifying years then your state pension will be less than £169.50 a week.
How can I get more state pension?
Defer when you claim it
One way to increase your state pension is to defer when you claim it.
Doing so will permanently increase the amount you get when you do receive payments.
You need to defer your pension for at least nine weeks after you reach the state pension age to get the increase.
Your state pension rises by 1% for every nine weeks you push back the payment.
If you defer your payments for a year then you would get an extra £12.82 a week at the current pension rate.
The cash is added to your state pension payment each month.
If you receive the old state pension then the rules are slightly different.
You only need to push back the date you claim your pension for at least five weeks to get a boost.
After this point, your state pension will increase by 1% for every five weeks you delay claiming it.
Doing this for one year would be equivalent to a boost of 10.4%.
If you deferred your old state pension for one year then you would get an extra £17.63 a week at the current rate.
Fill gaps in your record
Another way to boost your state pension is to pay to fill in gaps in your National Insurance record.
In some cases, the amount of money you would spend to do this is less than the extra state pension you would get.
Tom Selby, director of Public Policy at AJ Bell, said: “It is possible to buy extra NI years to cover any gaps and boost your entitlement.
“Generally, it makes most sense to consider this if you’re approaching state pension age and are therefore less likely to build up entitlement through work.”
You can usually only pay to fill gaps in your National Insurance record for the past six tax years.
Every tax year ends on April 5.
This means you have until April 5, 2030 to pay for gaps for the 2023 to 2024 tax year.
The cost to fill these gaps will depend on the National Insurance you have already paid.
You may want to pay voluntary contributions if:
- You are close to the state pension age and do not have enough qualifying years to get a state pension
- You are nearing the state pension age and want to increase your state pension
- You know that you will not be able to get any qualifying years you need to get the full State Pension during your working life
- You are self-employed and have a profit of less than £6,725 a year
- You live outside the UK but want to qualify for certain benefits
- You live outside the UK but want to qualify for the state pension
- You are not able to claim National Insurance credits
For the 2024/25 tax year, it costs £17.45 for every week of contributions you want to complete.
But if the gap in your record was between April 6, 2016 and April 5, 2023 you pay £15.85.
This is the rate that applied in the 2022/23 tax year.
Check your payments are correct
Make sure to check that your payments are correct.
The DWP has been investigating pension underpayments since January 2021.
So far it has found 119,050 cases where pensioners were underpaid their state pension between January 2021 and September 2024.
If you think your state pension is lower than it should be then contact the DWP to confirm that you are being paid correctly.
What other help is available?
If you do not qualify for a state pension then you may be able to apply for Pension Credit or other benefits.
Pension Credit gives you extra money to help pay for your living and housing costs if you are above the state pension age and have a low income.
You will be eligible if:
- You and your partner have both reached state Pension age
- One of you receives housing benefit for people over state pension age
- You have a weekly income of up to £218.15 if you are single
- An income of up to £332.95 a week if you have a partner
Income includes the state pension, other pensions, earnings from employment and self-employment and some benefits.
If you are eligible then you could get up to £218.15 a week if you are single or up to £332.95 if you have a partner.
Meanwhile, if you have reached the state pension age and are in supported, sheltered or temporary housing then you may be able to get Housing Benefit.
This can help you to pay your rent.
Around 1.1 million pensioner households currently claim the benefit, according to official figures.
To be eligible you must pay rent, have a low income and savings of under £16,000.
The average claim is worth around £4,338 a year.
You may be able to claim support from your local council through the Household Support Fund.
The scheme offers help to struggling households and has been extended several times since it was introduced by the Government in 2021.
The money is given to local councils to distribute, which means the support available varies depending on where you live.
Every council decides how to distribute the money, so it could be paid out as a cash transfer or shopping voucher.
For example, West Berkshire Council has put aside £45,000 to help struggling pensioners this winter.
The money is being spent on hot meals, energy costs and essential repairs.
Meanwhile, Essex Council has set aside £1 million to support low-income pensioners with essential costs over the winter months.
In Manchester the council has given nearly 5,000 pensioner households up to £200 to help with their energy bills.
Contact your local council for more information.
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