Older state pensioners are at risk of being left thousands of pounds worse off compared to their younger counterparts. State pensioners on the Basic rate, which applies to men born before 1951 and women born before 1953, receive a much lower weekly amount.
New Flat Rate Increase
The full flat rate for people who reached state pension age from April 2016 onwards is set to rise by 4.8 per cent, from £230.25 to £241.30 per week. This represents an annual increase of £575, bringing the total to £12,548 per year.
Basic Rate Stagnation
In contrast, the amount for those on the Basic state pension will rise from £176.45 to £184.90 per week, equating to £9,614 annually. This leaves older pensioners nearly £3,000 worse off each year.
Two-Tier System Legacy
Before 2016, the UK operated a two-tier state pension. Individuals could receive the full basic state pension if they had paid National Insurance contributions for at least 30 years, with potential eligibility for additional state pension based on contributions.
Single-Tier Reform
The new system, announced in 2014, was designed to be a single-tier pension calculated solely by National Insurance contributions and the duration of payments. Speaking after the announcement, then-Pensions Minister Steve Webb (Liberal Democrat) stated: "The new state pension will be fairer to the low-paid, the self-employed and carers, and make it easier for people to understand what they will get from the state."
Petitions and Government Response
Repeated petitions have been lodged on the Parliament website. The most recent, in May 2024, received a response from the then-Conservative government: "The government has no plans to provide all pensioners born before 6 April 1951 with the new state pension."
The response added: "Comparing the headline full rates alone is misleading: this does not reflect the full position for people under each system. Although the systems are different, they both reflect the National Insurance contributions an individual has made over their lifetimes."
