Two readers want to know why they are not getting the full amount after years of working
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Dave writes: I have received a letter advising that my state pension from 10 April 2025 will be £180.37 per week. I started to receive my pension when I was 65 in July 2004 and appreciate my pension is reduced because I was contracted out by NatWest following inclusion in their pension scheme. Is there any way I can “buy back” or any other method whereby I could increase this weekly payment, which is £49.88 per week less than the present full pension?
And a similar question from another David: I am an 80-year-old male, and I wondered if you would be able to give me some advice. My new state pension started on the 7 April 2025 and is now £200.56 per week. I have paid 49 years of National Insurance (NI) with no breaks. Most of this has been self-employed, but I am still not receiving the full amount. Please could you help me to see if there is any way I can receive the full amount?
Paul replies: Dave and David, let me say right away that as far as I can see, you are both getting the full state pension for the time you were born and, in any case, if you were not, it is now too late to boost it.
I believe you have both been deceived by the boasts of Government ministers that the state pension rose this month by 4.1 per cent to £230.25 a week.
For the great majority of the 12.5 million who got a state pension, which rose in April, such statements are just not true. That is because there are two sorts of state pension – the new pension, which is now £230.25 a week, and the old or basic state pension, which is now only £176.45 a week.
Which you get depends on your date of birth. Only one in three pensioners get the new pension – the higher amount.
The dividing line between new and old for men is 6 April 1951. Men born before that get the smaller old state pension, and younger men get the new one.
The line is different for women – those born before 6 April 1953 get the old state pension, and younger women get the new one. So if you are a woman now aged 72 or older or a man aged 74 or older, you get the old pension.
Both of you get the old state pension. So far, so straightforward.
But why, you wonder, do both of you get more than the basic £176.45? That is because the old state pension comes with extras.
There is a graduated pension of a few pounds a week based on earnings between 1961 and 1975 – known officially as the Graduated Retirement Benefit.
And there is an additional pension – called SERPS or state second pension, based on earnings from 1978 to 2016. They can add a lot and, just to confuse things, not everyone gets either.
From what you tell me, Dave, you do not get any additional pension because you worked for a bank and were in its very good company pension scheme. Your pension is not reduced as you suggest, but it is without SERPS, which your bank pension replaces. You paid a lower rate of NI contributions. So your only extra is the graduated pension.
You also mentioned being contracted out – in such a scheme, workers and employers paid a lower rate of NI contributions in exchange for a company pension that provided a retirement benefit equivalent to, or better than, the benefit they would have received from SERPS.
David, on the other hand, you get a graduated pension and some SERPS as well, taking you to just over £200 a week.
But both of you are still well below the new state pension, which younger people get. With this and those misleading statements by politicians, I am not surprised you both feel your pension should be more.
There is one more wrinkle to iron out. Did the pension rise by 4.1 per cent in April, as politicians tell us? Sort of, but not for most pensioners. The basic pension and the new state pension both rose by 4.1 per cent. But any extras, such as SERPS and graduated paid with the old pension or protected payments with the new one, increased by only 1.7 per cent.
As did any extra paid for deferring your pension. Anyone who gets any of those extras will see an increase from April in their total weekly amount of less than 4.1 per cent. I reckon the overall rise in Dave’s pension was about 4 per cent, and in David’s, only 3.8 per cent.
Oh, I nearly forgot. Both of you asked if you can boost your pension now? Sorry, but the answer is ‘no’. Even if either of you had a gap in your NI contributions record – which I don’t think you do – it is too late for anyone on the old state pension to fill those gaps now. People on the new state pension can fill some gaps but only back to 2019/20.
And finally, I remind you both that at the age of 80, you do at least get an extra 25 pence a week ‘age addition’! That has not been increased since it was introduced in 1971 on top of the full state pension, which then was just £6 a week. If it had gone up in line with the pension, it would now be £7.35 a week. Slightly more worth having!
