Petition Increase the basic State Pension to match the new State Pension

Government responded

This response was given on 25 April 2023

The Government has no plans to increase the basic State Pension to match the new State Pension.

The Government is committed to a decent State Pension as the foundation of support for people in retirement.

We are forecast to spend around £152 billion in 2023/24 on benefits for pensioners, including around £124 billion on the State Pension.

As a result of the Government's triple lock policy, in April, the State Pension saw its biggest ever rise, increasing by 10.1%. The full yearly amount of the basic State Pension is over £3,000 higher, in cash terms, than in 2010. That’s £790 more than if it had been uprated by Prices, and £945 more than if it had been uprated by earnings (since 2010).

It is not possible to make direct, like for like comparisons between State Pension amounts under the pre-2016 State pension system and the new State Pension. Although the systems are different, they both reflect the National Insurance contributions an individual has made over their lifetimes. It is not the case that everybody who receives the new State Pension will immediately receive the full rate of £203.85 per week and that everyone in the pre-2016 only receives the basic State Pension.

Under the pre-2016 system, people receive different amounts depending on the National Insurance contributions they made. In addition to the basic State Pension, people could also have qualified for the additional State Pension for the years that they paid the full rate of National Insurance. This means that the State could pay them in excess of £200 on top of the basic State Pension, which may result in a much higher State Pension amount than the new State Pension.

For years when someone was in an occupational pension scheme, and not paying into the additional State Pension, they paid a reduced rate of National Insurance and paid into a workplace or private pension instead. This is sometimes referred to as contracting-out. Contracting out impacts both those in receipt of the new State Pension and basic State Pension. For those under the pre-2016 system, their workplace or private pension would also be paid in addition to the basic State Pension.

There are other reasons why it is not possible to make direct comparisons between the pre-2016 and new State Pension systems. For example, people in the new system will, in general, have to wait longer for their State Pension than those under the pre 2016 system. The State Pension age has been 66 since 2020 and is rising to 67 by 2028. By contrast, most of those who receive their State Pension under the pre 2016 system will generally have received their State Pension at 65 or below, and therefore will in comparison with people on the new system, receive it for more years in total.

Whilst the new State Pension reforms apply to people reaching State Pension age from 6 April 2016 onwards only, the Government remains absolutely committed to supporting pensioners who reached State Pension age before then as well.

The Government also provides additional support to older people, which includes the provision of free bus passes, free prescriptions, Winter Fuel Payments, and Cold Weather Payments.
The Government is committed to alleviating pensioner poverty.

Around 1.4 million of the most vulnerable pensioners also receive some £5 billion of Pension Credit, which tops up their retirement income and is a passport to other financial help such as support with housing costs, council tax, heating bills and a free TV licence for those over 75.
Pension Credit is a means tested benefit and provides a top up for people of State Pension age to a weekly minimum amount, (currently £201.05 for single people and £306.85 for couples). These amounts may be higher for those with caring responsibilities, a severe disability or certain housing costs. This approach ensures that spending is targeted at those most in need. Information about Pension Credit is available from the Government website – www.gov.uk - by entering ‘Pension Credit’ into the search bar.

The Government has also acted to protect pensioners against the current Cost of Living situation. This includes a £650 Cost of Living Payment to more than 8 million low-income households on Universal Credit, Tax Credits, Pension Credit and legacy benefits, with separate one-off payments of £300 to pensioner households (through and as an addition to the Winter Fuel Payment) and £150 to individuals receiving extra costs disability benefits. 

Department for Work and Pensions