State pensioners born before 1953 are finding themselves £56.40 worse off a week compared to younger retirees. Under the Department for Work and Pensions (DWP) scheme, the basic and new state pension are two different rates.
The full state pension is worth £241.30, while the basic rate is £184.90. That's a £56 difference. People who reached state pension age before 6 April 2016 are on the basic rate.
Who is affected by the lower rate?
You need to have at least 30 years of national insurance contributions to receive the full amount. If you're a woman born before 6 April 1950 or a man born before 6 April 1945, you may need more, so it's a good idea to seek specialist advice.
Before 2016, there was a "two-tier state pension". People could get the full basic state pension if they had paid national insurance contributions for at least 30 years, but then depending on the level of contributions, they may have been eligible to receive some "additional state pension".
The move to a single-tier system
But a new system, first announced in 2014, was designed to be single-tier, calculated by just national insurance contributions and the length of time someone had paid them.
Speaking after it was announced, the then-pensions minister Steve Webb, for the Liberal Democrats, said: "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 when they reach state pension age."
Government response and future outlook
Eventually, the old state pension will be phased out, but some are calling for it to be replaced before this naturally happens.
The Labour Party government said: "The government has no plans to provide all pensioners born before 6 April 1951 with the new state pension."
The response went on: "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."
