One area of the UK displays the postcode lottery of the State Pension, receiving £42,000 more than their neighbour over 20 years. Analysis of State Pension records by the Mail has found some borough council areas see thousands more in pension payouts than others nearby.
The City of London is the top spot in the UK, with pensioners receiving £12,101 a year on average. This is £2,105 a year more on average than those in Newham (£9,996 a year), just eight miles away. This adds up to a gap of £42,000 over a 20-year retirement.
In second and third place are St Albans and Tandridge, with pensioners receiving around £12,000 a year. The rest of the top 10 is made up of locations across the south of England, with many in Hertfordshire, Surrey Heath, and Mole Valley, all of which border the M25.
Outside of the southeast, the area with the highest State Pension average is Aberdeen in Scotland, where pensioners receive £11,879 a year. This is followed by Harborough in the East Midlands, with £11,876 a year.
Pension and retirement policy expert Tom McPhail said: “The two-tier State Pension for people who had a full working career could result in really quite generous State Pensions.
“Now the new State Pension is less generous than those combined double-tier State Pensions for those on higher salaries, but more generous to low earners.”
Sir Steve Webb, a former pensions minister and now partner at consultancy LCP, said: “In areas of high unemployment and low wages, other things being equal, you will see lower State Pensions.
“In parts of the country where there’s a higher than average proportion of people who’ve come into the UK during their working life, they may have lower State Pensions as it’s a contributory system.”
As well as a regional divide in pension amounts, there is a gender divide. Older women receive the lowest State Pension compared to male counterparts, as they are more likely to have gaps in their NI contributions record due to family care demands.
Women in Newham receive the worst state pension (£9,781 a year) and men over 90 in Chelmsford receive the best, with an average of £14,577 a year.
