The latest figures from the Department for Work and Pensions (DWP) show that in November 2021, more than 12.4 million people across the UK were receiving State Pension payments, including 1.1 million living abroad and 992,052 in Scotland.
Of the overall Scottish total, there are 543,614 women and 448,435 men receiving either Basic State Pension or New State Pension payments.
Interestingly, of the UK total, there are 10.1 million older people receiving Basic State Pension payments - worth up to £141.85 per week - compared to 2.4 million getting New State Pension payments, which are worth up to £185.15 each week.
For many people, State Pension payments provide crucial monthly financial support and for some, it may be their only source of income during their retirement years, something which Helen Morrissey, senior pensions and retirement analyst, at Hargreaves Lansdown is keen for more women to be aware of to ensure they are maximising their retirement income.
The new statistics show that in November 2021, some 1.5m women and 448,082 men received less than £100 per week in State Pension payments.
Median income for women on the Basic State Pension is £146.39 compared to £172.68 per week for men.
Women on the New State Pension get an average of £164.90 per week compared to an average of £170.51 for men.
Commenting on the latest figures, Helen Morrissey, said: “The State Pension gap is still narrowing, with the amount women receive continuing to rise. The introduction of the new State Pension in 2016 has significantly boosted the amount women receive and we are seeing a big drop in the number of women receiving less than £100 per week in State Pension.
“As more women retire into the new State Pension system we should see incomes continue to grow and the introduction of auto-enrolment will see many more women further build their retirement resilience with a workplace pension.”
Helen continued: “It is hugely important that women focus on building their own retirement wealth. The new State Pension does not allow you to inherit State Pension entitlement from a spouse in the same way the old system did, and so women’s State Pension is based on your individual National Insurance record.
“Similarly, it can be tempting to rely on a spouse’s workplace pension provision if it is particularly generous, but in the case of separation or divorce many women may find themselves approaching retirement with little in the way of pension income.”
The pension expert also explained how the State Pension forms the backbone of peoples’ retirement planning.
She said: “Under the current system you need 10 years’ worth of National Insurance credits to qualify for a State Pension and 35 years’ worth to qualify for the full amount.
“Women can often struggle to reach the full amount because they spend time out of the workforce looking after families. However, claiming state benefits during these times can mean you can still claim National Insurance credits and build your entitlement.”
How to boost your State Pension
Helen shares her top five tips to help increase your finances before and after you reach State Pension age.
Claim Pension Credit
If you are over State Pension age and on a low income then you should check whether you are eligible for Pension Credit - use the handy online calculator on GOV.UK here.
Pension Credit tops up your weekly income to £182.60 if you’re single and £278.70 in joint income if you have a partner.
It can also entitle you to other benefits such as help with Council Tax payments and a free TV licence for those aged over 75 - find out more here.
Check your State Pension forecast
Go online and check your State Pension entitlement on the ‘Check your State Pension forecast’ page on the GOV.UK website here.
This will also tell you your State Pension age - when you can officially retire and start collecting payments.
Claim Child Benefit
Women in particular miss out on valuable State Pension credits when they are at home looking after children. However, if they claim Child Benefit, they will receive National Insurance credits that count towards their State Pension. Many women have missed out on this in the past because their husband claimed the Child Benefit rather than themselves.
Others missed out when they opted out of Child Benefit after the introduction of the High-Income Child Benefit Tax Charge. If you claim Child Benefit in your name, then you will get the National Insurance credit towards your State Pension.
Specified Adult Childcare Credit
Are you under State Pension age and looking after a family member under the age of 12 while their parent or main carer goes back to work?
If this is the case, you could qualify for National Insurance credits under Specified Adult Childcare Credit as the working parent essentially transfers their NI credit to you.
There are other situations where you are receiving benefits and you can still claim National Insurance credits. For example, if you are off work sick on Statutory Sick Pay. It is always worth checking to see if you may be entitled.
Buy National Insurance credits
If you can spare the cash you can plug gaps in your National Insurance record by buying voluntary class 3 NI contributions.
Buying a full extra year costs around £825 and you can typically buy up to six years’ worth, though in certain circumstances you can buy more.
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