# Viral Facebook post compares the national living wage with the state pension

18 August 2020
##### What was claimed

The government minimum wage so that people can live reasonably is £8.72 an hour x 36 hours equals £1,256 per month, x 12 months equals £15,070 per year.

##### Our verdict

This is broadly correct for workers over the age of 25.

##### What was claimed

Pensioners who have paid half a century’s worth of tax and national insurance are given £8,840 to live comfortably.

##### Our verdict

This is the average amount per year that the bottom fifth of single pensioners by income were getting between 2015 and 2018, according to research by retirement finance company Just Group. The exact state pension depends on the individual.

“The government minimum wage so that people can live reasonably is £8.72 an hour x 36hrs equals £314.00 x 4 weeks equals £1,256.00 per month x 12 months equals £15070.00 per year.

Why is it that pensioners who have paid half a century’s worth of tax and N.I. are given £8840.00 to live on “comfortably”. What a disgrace it makes me sick pensioners are getting nearly half of the minimum wage.”

A number of posts making the claims above have been shared on Facebook over 50,000 times altogether.

The post compares the minimum wage for someone over 25, with an amount research found the poorest single pensioners were receiving on average. The claims aren’t wrong exactly, but could benefit from some context.

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## What is minimum wage?

The post correctly states that the national living wage (the minimum for those aged 25 and over) is £8.72 per hour, as of April 2020, unless they are in the first year of an apprenticeship.

The calculations in the Facebook post for how much someone working full time on this wage would earn in a year are roughly correct. If you assume someone is working the median number of hours a week (which was 37.2 in 2019) and that they get paid holiday (which not everyone does), they would get around £16,870 a year. That’s slightly more than the post claims.

The figure of £8.72 an hour is also 60% of median earnings (the point at which half of people are earning less and half are earning more). This was the government’s target to meet by 2020, which it has achieved.

The national minimum wage, which is the minimum per hour for those under 25, varies by someone’s exact age. This minimum wage is not 60% of median earnings.

Not everyone will be getting the level of minimum wage they are legally entitled to. The Low Pay Commission, which advises the government on this, estimates that in April 2019, 424,000 people were being paid less than the minimum wage they were entitled to, which is about 20% of minimum wage workers.

## How much is the state pension?

The Facebook post seems to be talking about the state pension, which most people are eligible for once they reach retirement age. How much you get (and indeed, whether you get it at all) is dictated by a number of factors, including when you were born, how long you worked and paid national insurance, and whether you got national insurance credits, for example if you were ill or unemployed.

For that reason, it’s difficult to talk about the figures for a state pension, as it varies so much depending on the individual.

Depending on when you were born, you either get the basic state pension or the new state pension. The full amounts for these per year are £6,980 and £9,110. Not everyone will get the full amount.

The £8,840 figure per year used in the Facebook post seems to have been taken from research done in 2019 by retirement finances company Just Group. We haven’t assessed their work in detail, but they analysed data between 2015 and 2018 and found that the bottom fifth of single pensioners by income were, on average, receiving about £8,840 “state benefit income”. This was made up of £7,644 state benefit and £1,248 from other sources.

## Can these figures be compared?

It’s not our place to say whether these two figures should or can be compared, but there are a few things to bear in mind if you do.

Obviously a state pension and a minimum wage differ in a number of ways. You may be taxed on a pension, as you would be if you were working, but you don’t pay national insurance contributions after retirement age (on either a wage or a pension).

These figures also may not be giving the whole picture. People in both groups may be receiving other benefits outside of these two figures too, like pension credit, a free TV license (still available to those over 75 who receive pension credit), or housing benefit, amongst other things.

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