The State Pension is a regular payment from the government that most people in the UK claim when they reach a certain age in later life. It can play an important role in retirement. If you are nearing retirement age, it’s well worth knowing what the average payout is so that you can plan accordingly.
How much is the full UK State Pension?
The UK State Pension is currently split into two systems: the new State Pension and the basic State Pension.
- Men born on or after 6 April 1951 and women born on or after 6 April 1953 can claim the new State Pension.
- Both men and women who reached State Pension age before 6 April 2016 can claim the basic State Pension.
The full rate of the new State Pension is currently £179.60 per week, while that of the basic State Pension is £137.60 per week.
What’s the average UK State Pension?
Not everyone gets the full amount of State Pension.
You need at least 35 years’ worth of National Insurance (NI) contributions to get the full new State Pension. For the basic State Pension, you need at least 30 years of NI contributions to get the full rate.
According to Which?, the average payout for the basic State Pension is currently £153.36 per week. For the new State Pension, the current average payout is £164.10 per week. So, the overall average payout is £158.73.
As you can see, the average basic State Pension payment is higher than the full rate of this pension.
This could be due to some people under the basic State Pension system having built up Additional State Pension, previously known as the State Earnings Related Pension Scheme (SERPS) or State Second Pension (S2P). This is an extra payment that eligible pensioners get on top of their basic State Pension.
You can find out more about this Additional State Pension on the gov.uk website.
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How do I find out if I am getting the right amount?
If you have not yet retired but want to know how much you could get, you can use the government’s online State Pension forecast tool to find out. The tool will also tell you when you can claim and how to increase the amount, if possible.
If you are already receiving your State Pension and feel that it has been calculated incorrectly or you want an explanation of how it’s been calculated, contact the Pension Service.
In the recent past, there have been high-profile errors involving the State Pension. For example, The Department for Work and Pensions recently revealed that up to 200,000 women of retirement age were underpaid their State Pension due to the system failing to automatically calculate cash increases.
Is the average UK State Pension enough to retire on?
Probably not.
Even for a basic standard of living, the average annual payout of around £8,250 is not enough to live on. Relying on your State Pension alone could leave you financially stretched in your golden years, according to experts.
While it’s certainly important, when it comes to retirement planning, the State Pension should probably be viewed as a supplement to other sources of retirement income, such as a workplace pension or a personal pension.
