How Much Will Your State Pension Pay You?

FUTURE PROOF: Most underestimate how much they'll need in retirement, and the State Pension barely even covers essential costs

Emma Simon 29 September, 2014 | 10:00AM
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Politicians are often derided for not knowing the price of a pint of milk or loaf of bread. But last week the shadow secretary for work and pension, Rachel Reeves, got into hot water for underestimating how much the state pension pays out. 

Rather than simply showing how out of touch politicians can be, her answer—that it was 'just less than £100 a week'—also reveals the complexities of our current pension system. 

The basic state pension is in fact £113 a week, although many receive more as they are entitled to additional payments though the State Second Pension (formerly Serps). According to Tom McPhail of Hargreaves Lansdown, the average state pension payment is £122.73 a week, with around a quarter of the UK's 12.9 million pensioners receiving more than £150 a week. Not all qualify for the full basic amount of £113 a week, however, as they have made insufficient National Insurance contributions. 

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About Author

Emma Simon

Emma Simon  is a financial journalist, specialising in investment and consumer issues, writing for Morningstar.co.uk

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