Drop in number of people claiming State Pension

The number of people receiving a State Pension fell by 1.6% in the year to August 2020, new figures published by the Department for Work and Pensions (DWP) have revealed.

This equated to a fall of 200,000 people, to 12.4 million, amid rises to the State Pension age.

Since December 2018, the State Pension Age has been raised above 65 for both men and women, which the DWP indicated has resulted in fewer new claims. In August, the minimum State Pension Age was 65 years and 10 months, and this reached 66 years in October.

The DWP figures also showed that 55% of people claiming benefits are at the State Pension Age, with 12.5 million out of a total 22.8 million. The average weekly payment for people receiving a State Pension was £154.74 last August, which is an increase of £6.12 since August 2019.

Commenting on the new data, interactive investor head of pensions and savings, Becky O’Connor, suggested that increases to the State Pension age are saving the government money, but warned that the personal cost of these rises can be significant for those due to retire.

“The State Pension makes up a large proportion of retirement income for those who receive it,” she said. “It is likely this proportion will grow larger, as more people retire with less generous defined contribution pensions, rather than final salary schemes.

“The State Pension Age and the Normal Minimum Pension Age are set to increase further, to 67 and 57 respectively and then again.

“As the goal posts shift, the prospect of enjoying a retirement grows weaker for millions of people. Our working lives are getting longer, but this is not necessarily aligned to a rise in healthy life expectancy, which is falling.

“For workers, this serves to underscore the need to contribute as much as possible to a workplace or personal pension while you are in employment, to reduce your individual dependence on the State Pension when you retire.”

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