State pensioners born before 1951 have been told they will receive £215 less per month than those retiring under the newer system introduced in 2016. As reported by Birmingham Live, this difference has led to confusion, as many older pensioners feel they are missing out despite years of contributions.
Government officials insist that while the basic state pension is lower, many older retirees receive additional state pension top-ups, meaning they are not necessarily worse off overall. However, the existence of two different pension rates has left many pensioners questioning the fairness of the system.
Why Some Pensioners Will Receive £215 Less
There are currently two state pension systems in the UK:
- The new state pension – For people who reached retirement age after April 2016. From April 2025, this will be worth £920 per month.
- The basic state pension – For men born before April 1951 and women born before April 1953. From April 2025, this will be £705 per month, meaning older pensioners receive £215 less per month than those on the new system.
This change was introduced to simplify pension payments, but the transition has caused uncertainty. Many older pensioners feel unfairly treated, especially when they compare their payments to those retiring under the new system.
Are Older Pensioners Worse Off?
The government insists that the difference in base payments does not mean older pensioners are losing out overall. Many of them qualify for additional state pension payments, which were available before 2016. These top-ups, based on National Insurance contributions, can increase total monthly payments, sometimes bringing them in line with or even exceeding the new state pension rate.
However, not everyone qualifies for these top-ups, leading to cases where some older pensioners do receive significantly less than those under the newer system. The two-tier system has left some retirees struggling to understand why their payments differ so drastically from newer pensioners.
Why the Government Changed the Pension System
The 2016 state pension reform was introduced to create a simpler and fairer system, particularly benefiting groups who were previously disadvantaged, including:
- Women (who historically had lower pension entitlements due to career breaks)
- Lower earners
- The self-employed (who previously received lower pension contributions)
Former pensions minister Steve Webb explained:
“The average man gets slightly less under the new system, and the average woman somewhat more – which was part of the point of the reforms. So the main thing that the new system does is favour women, lower earners and the self-employed at the expense of better-paid men.”
Over time, as more people retire under the new system, the basic state pension will be phased out, and all pensioners will receive payments under the same framework.
What This Means for Pensioners
For now, pensioners who retired before 2016 will continue receiving the basic state pension, unless they qualify for additional top-ups. Anyone unsure about their entitlement can check their pension forecast through the UK government’s pension service or seek financial advice.
While the government insists the £215 difference does not leave older pensioners worse off in most cases, the lack of clarity over how payments are calculated continues to cause frustration. Many pensioners remain concerned about whether they are receiving the full amount they are entitled to.
