State Pension 

Majority clueless about state pension

Majority clueless about state pension

The majority of those approaching retirement are in the dark about their state pension, Retirement Advantage has revealed.

The firm’s survey of 1,013 people aged 50 plus in March revealed 61 per cent have not asked for a state pension forecast and 20 per cent do not know what one is.

The findings come as the Conservative Party manifesto pledged to scrap the triple lock on the state pension, which was put in place to guarantee that pensions rise by the same as average earnings, the consumer price index, or 2.5 per cent, whichever is the highest.  

Andrew Tully, pensions technical director at Retirement Advantage, said: "These figures highlight a worrying trend among those approaching retirement.

"Not only are many unaware of the state pension forecast system, but many who are aware of it have not asked for a forecast of the state pension to which they will be entitled.

"We have seen many changes introduced to the state pension system over the last 10 years, which means people need to check their forecast to see how much they will receive."

Under the new state pension system, the amount of state pension that a person receives depends on how many qualifying years they have during which they made national insurance contributions.

However people require a minimum of 10 qualifying years to receive anything at all.

Mr Tully said that the amount people receive “varies broadly”. 

“If we assume a 20-year retirement, a person who only has the minimum 10 qualifying years will receive £47,840, while someone with the maximum 35 years will receive £165,932,” he said.

“The fact that the range is so broad makes it especially important for people approaching retirement to use the state pension forecast system – so that their plans for retirement income aren’t scuppered by any last-minute surprises.”

Matthew Harris, director of Harris Independent Financial Advice in Edinburgh, said that everyone in their 40s and 50s should log on to the govenrment system and request a pension forecast.

“The forecast that people receive is quite often very different to what people think,” he said. “That’s especially true because a lot of government literature has given the impression that everyone will get £155 a week, and that’s obviously not the case.”