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Home Finance Women main beneficiaries of state pension changes but clock is ticking if you need to plug gaps

Women main beneficiaries of state pension changes but clock is ticking if you need to plug gaps

by uma


  • There were 12.6 million people receiving the State Pension in August 2022, an increase of 130,000 on a year earlier.
  • There were 2.9 million people receiving the new state pension. This is an increase of 670,000.
  • The average weekly payment for people receiving a State Pension was £165.58, an increase of £6.47 since August 2021.
  • Women received on average £155.24 per week in state pension. This compares to £177.78 for men.
  • You can currently buy National Insurance credits to plug gaps going back to 2006. However, from 6 April this window closes, and you can only go back six tax years.

The DWP has issued quarterly benefit statistics https://www.gov.uk/government/statistics/dwp-benefits-statistics-february-2023

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown:

“State pension incomes continue to climb with women retiring under the new state pension system being the major beneficiaries. The average amount of new state pension claimed by women is £170.52 compared to just £152.12 for a woman claiming the basic state pension – it is an enormous gap that makes a huge difference to women’s retirement prospects.

It has also allowed women to significantly close the gender gap, although this isn’t all good news, because the increase for women has been accompanied by a cut for men – who claim an average of £175.84 in new state pension per week compared to £178.60 under the basic system. The playing field is levelling off though it’s important to add that not everyone gets a full state pension and there are still 1.8m people receiving less than £100 per week.

People retiring under the new state pension system usually need 35 years’ worth of qualifying National Insurance Credits to claim a full state pension. Many people receive less than this due to gaps in their employment record. If you do have gaps, then it’s worth checking with DWP as you may be able to claim benefits for these time periods that come with a voluntary National Insurance credit.

If you can afford it, you can also buy credits – a full year costs around £800 and for each year bought you get 1/35th of a year’s state pension – around £275. This means you effectively earn your money back in around three years so it can prove very good value. If you’re a man born after 5 April 1951, or a woman born after 5 April 1953 you can currently plug gaps in your National Insurance record going back to 2006 but this window is rapidly closing and from 6 April you will be restricted to plugging gaps from the last six tax years only. It is, however, really important to check that it is worth your while paying for these credits so always check with DWP before doing so.

Making sure those on lower incomes claim all they are entitled to is also hugely important. There were 44,000 fewer recipients of Pension Credit compared to the same period last year. This could be down to more people retiring under the new state pension system but it’s clear there are still many people out there who could be receiving this valuable benefit who aren’t, and we await data showing whether the government’s drive to increase take up has been successful or not. In addition to topping up the income of the poorest pensioners it acts as a valuable gateway to other important benefits – most notably the extra cost of living payments issued by government and so its hugely important that everyone who could benefit does so.”