Getting enough state pension?

Dominic Thomas
Dec 2022  •  12 min read

Are you getting enough state pension?

This item is relevant to women aged at least 69 and men 71 or older.

The State Pension is regularly in the news, yet it is widely misunderstood. It has not helped that Government policy over the decades has altered it considerably as society has changed, both in terms of equality and longevity. As a result there are layers to the State Pension, not everyone gets the same amount.

In recent years it came to light that some pensioners had not been receiving what they were due. According to the DWP this dates back at least as far as 1985. Initially in March last year the DWP estimated that about 134,000 pensioners had been underpaid, but by  July this year the figure rose to 237,000 with underpayments worth about £1.4bn.

The main challenge is accurately assessing all the data and making recompense and in practice the DWP have flagged a possible 400,000 cases that require a review. To complete the review process alone along the original timescales is by the end pf 2024 (which will be too late for many) means reviewing 19,000 cases a month, at the last count only 4,000 cases were being reviewed each month. The DWP is hoping that increasing staff from 500 to 1500 and better automated systems will help them get on track… errm, good luck with that. Let’s remember that the problem is one of poor data in the first place with errors going unspotted for many years, there is already concern that even the solutions will contain errors.

At the time of writing around £200m has been paid of the estimated £1.46bn and many suggest the process may well take 5 years to complete.

According to the DWP, those impacted are people that claimed their pension before April 2016 and do not have a full National Insurance record, largely impacting married (or widowed) women. Tracing people is problematic but around 118,000 that could be traced were underpaid by an average £8,900 each. Some payments are much larger.

The DWP advise that they will be in touch, frankly I would not wait for them to contact you if you think you may be affected. You can and should check your State Pension here: www.gov.uk/state-pension. Please note this problem really relates to the older State pension, not the one that superseded it in 2016. In reality that means if you are a man and born before 6 April 1951 or a woman born before 6 April 1953. Today (December 2022) you would therefore be at least 69 if a woman 71 if a man. If it helps, Liverpool football legend Kenny Dalglish and pop veteran Chris Rea (On The Beach and Driving Home for Christmas) were both born 4th March 1951 or American Mary Steenburgen (of Back to the Future) in February 1953 or our own Jenny Agutter (The Railway Children and Logan’s Run) who was born in December 1952.

THOSE PROBABLY SHORT-CHANGED

The DWP focus on these main categories

  • Someone already getting State Pension who got divorced or had their civil partnership dissolved.
  • A married woman whose husband reached State Pension age after them and who became entitled to his State Pension before 17 March 2008
  • A husband, wife or civil partner in a couple where both had reached State Pension age and the other person has died and not yet claimed their State Pension, or
  • Someone aged 80 and over who has either no State Pension or Graduated Retirement Benefit, as they need to make a claim to get any Category D State Pension.

APRIL 2023 – THE INCREASE for 2023/24

I was asked recently if everyone’s State Pension will be increased by the inflation rate of 10.1% announced in the November Budget. I can confirm that according to all the Government website information this is the case. I have used this link as the source: https://www.gov.uk/government/publications/benefit-and-pension-rates-2023-to-2024/benefit-and-pension-rates-2023-to-2024  but to save you the trouble, the salient information is shown below. The new State Pension has a much later retirement age and this is likely to be extended further. A small footnote in the Budget showed that the Government would set out its intention in 2023.

THE “OLD” STATE PENSION

Category Rates for 2022/23 Rates for 2023/24
Category A or B basic pension £141.85 / £7,376.20 £156.20 / £8,122.40
Category B (lower) basic pension – spouse or civil partner’s insurance £85.00 / £4,420 £93.60 / £4,867.20
Category C or D – non-contributory £85.00 / £4,420 £93.60 / £4,867.20

THE NEW STATE PENSION

New State Pension Rates for 2022/23 Rates for 2023/24
Full State Pension £185.15 per week / £9,627.80 per year £203.85 per week / £10,600.20 per year

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

Getting enough state pension?2025-01-21T15:51:59+00:00

Book Club

Book Club

Book Club is a present-day check-in of life as an older woman in 2018. Four female friends of “retirement age” meet regularly at their own private book club, taking turns to select a book for discussion. Vivian (Jane Fonda) encourages them to study “Fifty Shades of Grey”. Thus, begins a diet of mixed reactions to the book which inspires or encourages each of them to rediscover their “mojo”. This movie had the potential to explore and expose this apparently mysterious type of individual, the media invisible sixty-plus (some may argue forty-plus) female of the species. It also had the potential to be very funny.

There has been a welcome increase in the number of films released and aimed at the more mature market. Whilst it is possible to find many examples of films that include people over the age of 55, there are not that many by comparison. Hollywood and the world media at large are enchanted by youthful looks. A more healthy and realistic approach to representation in all forms is a welcome relief to a diet of heroes, fast cars and bullets. Perhaps I am too reductionist, but you know what I mean.

Pleasantville 1998 (had more to say 20 years ago)

Granted there are some funny moments, but the movie fell short, still concluding that fulfilment is only found through a man. Whilst I might agree that a form of fulfilment comes through a deep relatonship (for billions of people) it is not true for all. It is evidently not the case that only a man can make anyone else “fulfilled”. Neither do most women have the economic advantages that certainly three of these four have. The character of Diane is arguably the most perplexing, her husband died relatively recently and her overly concerned daughters Jill (Silverstone) and Adrianne (Aselton) want to move her out of  her beautiful Santa Monica and into their own renovated slip-free basement in “Pleasantville” because they fear she is too frail.. which stretches belief for many reasons. It is Diane that is swept off her feet by the alluring, just happens to be fabulously wealthy, Mitchell…. The portrayal of such neurotic daughters and their incredulity about their mother do not aid the female cause and are utterly unnecessary within the story.

LA LA Land

It’s not simply women that are stereo-typed. Most of us men don’t own a plane, don’t look like Don Johnson (Arthur) or Andy Garcia (Mitchell) either, and most of us cannot compensate by being half-decent mechanics or even vaguely passable dancers. Perhaps its my gender bias the felt that the male story-line crisis was more thoughtful. That said, I frankly did not understand the plot purpose of Federal Judge Sharon’s ex-husband Tom (Ed Begley who is 69) announcing his engagement to Cheryl (Mircea Monroe who is 36) whilst celebrating their son’s engagement.  Surely this was a set up for comedic gags that never materialised.

The truth is that this is a very LA centric group of women. There are 4 good actresses – Diane Keaton (72) plays Diane, Jane Fonda (Vivian) is 80, Candice Bergen (Sharon) is 72 and Mary Steenburgen (Carol) is 65. Yet all still must conform to the Hollywood image in a way that their male counterparts simply do not. This movie did nothing other than play it safe.

Every Stage

What on earth can we apply to financial planning? … well, for starters, life is for living and anything alive changes, be that through personal growth, death, sickness, divorce or any number of reasons. We can plan so much, hopefully few clients reach retirement and have a crisis of identity, but there is no sugar-coating the reality that this is a major life adjustment. In practice, most would be wise to consider the transition into retirement is likely to take adjustment – a 2 year adjustment would not seem unreasonable.

We can certainly help and plan for financial independence and the maintenance of dignity, by having sufficient resources or sufficient adjustments to lifestyle. These are hard truths, we are all aging, no amount of cosmetic surgery can alter the reality, merely the appearance of it. The greatest value is surely ensuring that you are living life on your own terms whenever possible. A great financial plan will provide you with the structure and financial architecture to ensure yours come to fruition. Money can offer freedom, but some will never live it.

Its fine as a “Rom-com” but falls way short of an address to Hollywood in the age of #MeToo, which is a pity. Here’s the trailer, but be warned – if you watch it, you have seen the film.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

Book Club2023-12-01T12:18:01+00:00
Go to Top