Recent data reveals that some state pensioners are receiving as much as £36,000 per year from their state pensions—nearly three times the standard full amount provided by the Department for Work and Pensions (DWP). These large variations stem from complexities within the old state pension system, which continue to affect retirement incomes today.
The current “full” new state pension pays £230.25 per week, amounting to £11,973 annually. However, the data shows 324 retirees receiving at least £692.30 weekly, translating to roughly £36,000 a year in state pension payments.
Under the old state pension system, the “basic” pension was £176.45 per week (£9,175.40 annually), supplemented for many by an additional earnings-related pension known as SERPS, which could add up to £222.10 per week. Furthermore, pension deferral practices have also contributed to some retirees’ elevated payouts.
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Sir Steve Webb, former Liberal Democrat Pensions Minister, commented on the findings, saying: “These figures show the wide variation in outcomes under the old pension system, where some individuals received very large pensions while others got much smaller amounts. Some people had additional state pension entitlements exceeding £300 per week, far surpassing the new state pension’s uniform rate. Although pensions this large cannot be accumulated under current rules, many who retired prior to 2016 will continue to receive above the flat new rate.”
Independent pensions expert Tom McPhail added, “The old state pension system created some spectacular winners compared to the new system, but also greater inequality—some benefited greatly, while others gained very little. Younger workers today face challenges like diminishing private pensions, later retirement ages, and a state pension increasingly eroded by taxes, leading to understandable feelings of frustration.”