PensionsDec 1 2015

‘Widespread uncertainty’ over state pension: PUFin

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
‘Widespread uncertainty’ over state pension: PUFin

Employees are confused about their entitlements to the state pension, including when they will receive it and whether they have paid enough NI contributions.

Martin Upton, director of the True Potential Centre for the Public Understanding of Finance, said: “There is widespread uncertainty about the new state pension and this is exacerbated by a quarter – 24 per cent – of employees aged 30 or over not knowing whether they’ve ever been contracted out.

“Some mistakenly believe that they’ll be entitled to the full amount, whereas in reality they will be disappointed by the actual amount they receive, with the inherent danger that it may then be too late for them to do anything to remedy the shortfall.”

Research by the Open University Business School’s True Potential Centre among 2,000 adults found that 60 per cent of employees were unaware they would not receive the full pension if they had been contracted out, while 45 per cent of employees expected to receive just £114.

A further 24 per cent were unsure if they had been contracted out.

Adviser view

Alan Solomons, chartered accountant and director of Middlesex-based Alpha Investments & Financial Planning, said: “The centre’s findings do not surprise me at all. There have been so many changes that even IFAs are finding it hard to keep up with what’s going on, as are accountants, so to expect the ordinary man on the street to follow is ludicrous.

“Government talk of simplification is double Dutch. It’s a complete minefield and a nightmare. The ordinary man hasn’t got a hope in hell.”