4 days ago
The retirees on £36k state pensions – triple the full amount
Hundreds of retirees earn state pensions of at least £36,000 – three times the 'full' amount, analysis shows.
A 'full' new state pension pays £230.25 a week, or £11,973 a year. However, complexities in the system have created large disparities between the amounts pensioners receive.
There are 324 retirees who receive at least £692.30 a week in state pension payments, equating to an annual income of £36,000, according to calculations based on Department for Work & Pensions (DWP) data.
All of these retirees receive the old state pension, having retired before April 2016, when the new state pension system was introduced.
Many people who retired before the state pension changed in 2016 have been able to boost their payments to much higher amounts.
The 'basic' element of the old state pension is currently £176.45 a week, or £9,175.40 a year – £2,800 less than the new state pension.
But many older retirees also draw money from an additional earnings-related pension, commonly known as Serps, for a maximum of £222.10 a week.
It is also possible to delay the start date for drawing the old state pension to boost payments further. In the past, delaying drawing the old state pension raised the starting amount by 10.4pc for each year deferred. The rate has since been reduced to a 5.8pc uplift for every year of deferral.
The Telegraph previously revealed that some pensioners receive as much as £50,000 a year from the state pension, while others receive pennies.
Around 8.4 million people still receive the old state pension, paid to those who reached state pension age before April 2016, compared to 4.6 million on the new state pension, according to DWP figures.
Despite the greater potential to boost payments under the old system, women, the self-employed and low earners lost out. This was because they were likely to have lower National Insurance contributions, and did not benefit as much from Serps, which was earnings-linked.
The new system boosted payments for these groups, but left pensioners stuck on the old system at a permanent disadvantage.
Sir Steve Webb, a former pensions minister who introduced the 2016 changes and is now a partner at pension consultants LCP, said: 'These figures are a reminder that outcomes under the old state pension system could vary hugely, with some people receiving very large pensions and others very small ones.
'In particular, some people with very large entitlements to the additional state pension on top of their basic pension could have pensions of £300 per week or more, significantly higher than the standard rate of the new state pension.
'In the future, it will not be possible to build up state pensions this large, but there are significant numbers of people who retired before 2016 who will continue to enjoy pensions above the new flat rate.'
Tom McPhail, an independent pensions expert, said: 'The old state pension system produced some spectacular winners, compared to the new state pension, but it also tended to be more unequal – some did very well, others largely missed out.
'For younger workers today, facing poorer private pensions, later retirement and a state pension that is being rapidly overtaken by taxes, it is understandable if they feel hard done by.'
