There are a group of pensioners not earning enough to fund a minimal standard of retirement 

Older retirees are over £8,000 short of meeting their basic needs, as a result of lower state pension payments, data shows.

A single pensioner would need a pre-tax income of £17,400 a year to achieve a minimum standard of living in retirement, according to the Joseph Rowntree Foundation think-tank.

A minimum standard of living in the UK today includes how much you have for food, clothes and shelter – covering needs, not wants.

The full new state pension is £11,973 a year for anyone who retired after 2016. Older pensioners who retired before 2016 receive the basic state pension receive £9,175.

Most of these retirees receive an earnings-related top-up, known as Serps – however around 1.5 million do not.

As a result, anyone qualifying for the full basic element of the old state pension would be left £8,225 short of reaching the think-tank’s living standard threshold.

The different types of state pension

There are two different state pensions, depending on when you reached state pension age.

They are:

The basic state pension. If you’re a man born before 6 April, 1951, or a woman born before 6 April, 1953, you’ll get this. The full amount is worth £176.45 per week.

The new state pension. You’ll get this if you were born on or after the above dates. The full amount is worth is £230.25 a week.

If you receive either of these two pensions, your payment will go up by the highest of inflation, average earnings growth or 2.5 per cent next year – known as the triple lock policy.

What is Serps?

Some people on the basic state pension receive an “additional” state pension, which is often called Serps (State Earnings-Related Pension Scheme) or state second pension – as these are names it was given between 1978 and 2016.

This is extra money you could get on top of your state pension, but the amount depends on multiple factors, including how many years you made national insurance contributions (NICs).

For the “additional” state pension, the triple lock does not apply, so the rule is that this goes up by inflation each year.

This means that overall, your pension may increase by slightly less than other pensioners.

Just over 6.9 million people are drawing money from Serps, the latest set of data from the government shows.

What can people do to boost their income?

Many pensioners will be looking for ways to increase their income. There are several options, most notably pension credit.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “If you are on a low income then it is vital to make sure you are claiming everything you are entitled to.

“Pension credit plays a vital role in boosting the income of the poorest pensioners as well as acting as a gateway towards other support such as help with NHS costs as well as a free TV licence for the over-75s. Despite this, it remains massively underclaimed. It is vital that if you think either yourself or a loved one may qualify that you put in a claim.”

However, Sir Steve Webb, former pensions minister and now a partner at LCP: warns: “If you expect to be on pension credit in retirement, small amounts of additional saving may not be advisable as they could reduce the amount of pension credit you get.

“In the worst-case scenario if you only had a small amount of pension credit entitlement and saved a bit more to boost your income you could lose not just the pension credit payment but all the benefits which come with being on pension credit, such as help with fuel bills and council tax.

“The goal for most people must be to combine state pension with workplace pension and other savings to lift them well clear of the pension credit level”.

Other people are boosting their state pension by inheriting someone else’s Serps.

Surviving spouses and civil partners can potentially inherit at least 50 per cent of certain state pension benefits in addition to any state pension they are entitled to in their own right.

Lisa Picardo, chief business officer UK at PensionBee, added: “For those affected, it’s important to explore all available options to improve financial security. It’s worthwhile checking whether you can make voluntary contributions to fill gaps in national insurance that could increase entitlement.

“Those who contracted out of Serps and opted to redirect NICs into a workplace or private pension plan, may have lost track of these retirement savings. The government’s pension tracing service can help find lost pensions – if traced these hard-earned savings can add to retirement income.”