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Women more reliant on state pension top-ups than men

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15/02/2022
Women are receiving less state pension than men, and they’re also more reliant on tops-ups from the government, official figures reveal.

In the year to August 2021, 12.5 million people were receiving the state pension, an increase of 88,000 on the previous year. Of these, 2.2 million received the new state pension.

The average weekly payment came in at £159.11, an increase of £4.37 according to the statistics from the Department for Work and Pensions (DWP).

However, drilling down into average amounts for men and women, both under the new state pension and pre-2016 state pension, the figures reveal men receive more than women.

Under the new state pension, men received an average of £170.50 per week, compared to £164.74 for women. Under the pre-2016 state pension, women received a lower £145.87 per week compared with men’s £172.64.

DWP noted that the introduction of the new state pension has “evened out some of the gap between the average weekly payments for men and women, as women tend to get more under the new rules than under the pre-2016 rules”.

But pension credit statistics revealed there were 1.4 million pensioners in receipt of the government top-up, worth around £5bn annually. DWP noted that there were 72,000 fewer recipients against the previous year.

Pension credit is an income-related benefit that tops up a pensioner’s weekly income if it’s below £177.10 for a single person or £270.30 for a couple. It also acts as a gateway to other financial help such as council tax, heating bills and the free TV licence for those over the age of 75.

Two thirds (930,000) of recipients were women.

‘Pension changes levelled the playing field’

Becky O’Connor, head of pensions and savings at Interactive Investor, said: “Changes to the state pension in 2016 levelled the playing field for women in terms of how much they typically receive. But they still get below average amounts on both the new and basic state pension. Meanwhile, the greater proportion of women in receipt of pension credit points to the overall greater dependence on state support among older women.

“The gender pension gap in the workplace is caused by women earning less and being more likely to take time out of work for childcare and other care demands. The consequence of this is more women being dependent on the state later in life. However, they usually get less here, too, because they have often taken more time out of work.

“Policies that help to redress the gender pension gap in the workplace should mean that fewer women have to rely on benefits to support them in old age.”

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “The comparison with women receiving the basic state pension is stark – on average they are getting almost £20 per week less than those on the new version. Over the course of a retirement this adds up to thousands of pounds less and this will have an impact on your standard of living, particularly if you don’t have much in the way of other assets to rely on. Many of these women will be eligible to claim pension credit and this can be shown in that around two-thirds of claimants are women.

“Pension Credit is a hugely important benefit but it remains a hugely underclaimed benefit – only around 60% of those who can claim it do and they are potentially missing out on thousands of pounds of much needed money. This is particularly important at a time when the cost of living is rising so sharply.”

Check if you, or your relatives qualify via the government’s Pension credit: How to claim page.

Related: See YourMoney.com’s The benefits worth £100s you could be missing out on for more information.

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