Old State pension v New State pension

kuepper

Until today's Budget details I'd never realised there was so much difference between them, about £250 a month. How can this be justified when someone on the new pension could have made fewer contributions than someone on the old. Seems highly inequitable, was the change never challenged in the courts?

TadleyBaggie

It's not that cut and dried. Someone on the old scheme could in theory getting way more that the flat new scheme if they were in SERPS and SSP. I'm currently getting over £250 pw because of this.

QrizB

kuepper said:

Seems highly inequitable, was the change never challenged in the courts?

The new pension pays out less money overall (it was intoduced to save the Treasury money), so the average new pensioner is worse off than they would otherwise have been.

Some individuals are winners, other are losers, but collectively they're worse off.

p00hsticks

As Tadley Baggie says it;s far more nuanced that the headline amounts.

For example, as both my parents reached SPA under the old scheme, my mother inherited pretty much all dad's State Pension when he died, and she now gets close on £300 a week  - that couldn't happen under the new rules, and it's considerably more than I can possibly achieve under the new scheme.

Audaxer

Many on the new State Pension need many more than 35 years NI to get the full amount. I am on the new State Pension and needed 49 years full NI to get to just below the maximum amount. 

molerat

kuepper said:

Until today's Budget details I'd never realised there was so much difference between them, about £250 a month. How can this be justified when someone on the new pension could have made fewer contributions than someone on the old. Seems highly inequitable, was the change never challenged in the courts?

Totally unfair that an old pensioner can get £168.30 per week more, with only 30 years needed, than a post 2016 pensioner. 

Not the whole truth though, the same as your assertion 

dunstonh

Until today's Budget details I'd never realised there was so much difference between them, about £250 a month.

Indeed.  The new state pension is lower than the older state pensions.

However, I suspect that, in reality, you are being biased by looking only at the basic state pension and ignoring Graduated, SERPS, and S2P, and comparing just the basic with the new state pension.

How can this be justified when someone on the new pension could have made fewer contributions than someone on the old.

The old state pension had periods when 30 years were required.     I need 44 years.

Seems highly inequitable, was the change never challenged in the courts?

Can't be challenged and it would be daft to go to court on a misconception.

Marcon

kuepper said:

Until today's Budget details I'd never realised there was so much difference between them, about £250 a month. How can this be justified when someone on the new pension could have made fewer contributions than someone on the old. Seems highly inequitable, was the change never challenged in the courts?

A misunderstanding which comes up time and again on this forum. See https://forums.moneysavingexpert.com/discussion/6508760/state-pension-increase-fairness/p1

hugheskevi

Using DWP administrative data, in May 2025, the mean weekly payment for those in receipt of pre-2016 State Pension was £207.01

For recipients of new State Pension the figure was £216.43.

The existence of contracted-out benefits, different pension ages, etc, complicate comparisons, but even setting them aside, the difference in amount received is under £10 per week so not a very large difference.

Silvertabby

I'm sure someone somewhere would have been tempted to save the Government (taxpayer) megabucks by putting ALL State pensioners onto the new single tier pension in 2016.  But that would have been totally unfair on all the 'old' pensioners who were on more than the nSP.  

Something like 2.5m pensioners are on State pensions of more than £13K,  many of whom will be pre 2016 pensioners.

Admit my neighbour will be in the minority, but his State pension is over £24K, due to high levels of SERPS/SP2 and deferral at the old, much more generous, rate of 10% per year.  I won't repeat what he says to the demands for ALL pensioners to be switched to the nSP rate.......

ADD.  Pre 2016 pensioners on just the old basic State pension, and who qualify for Pension Credit and all the other means tested benefits that being in receipt of PC opens the door to, wouldn't appreciate their total income of £14/£15K being dropped down to the nSP level (being a couple of £s over the means test limit) either.

The only losers under the new scheme are those who were contracted in and who were racking up substantial rates of SP2.  That ended in 2016, even though they carried on paying full rate NI.  Those with several years between 2016 and SPA could have gone on to accrue substantial amounts of additional State pension, instead of that being cut off from 2016 onwards.

 

hugheskevi

Silvertabby said:

Something like 2.5m pensioners are on State pensions of more than £13K,  many of whom will be pre 2016 pensioners.

81% (over 2.1 million) of the more than £13K State Pension group are pre-2016 pensioners.

92% (around 750,000) of those getting more than £15.6K State Pension are pre-2016 pensioners.