LV  

Savers unaware of state pension payouts

Savers unaware of state pension payouts
 

The majority (77 per cent) of adult workers do not know how much the state pension pays each week, which provider LV has labelled as “concerning”.

The full state pension pays £185.15 a week to all those that reached state pension age after April 6, 2016. Those who reached retirement before that date are paid £141.85 a week.

This amount changes every April. This year, the state pension is set to increase by 10.1 per cent, in line with September 2022's rate of inflation.

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“Only 23 per cent correctly told us how much the current state pension is,” said LV, which surveyed 4,000 adults across the UK.

“This is concerning, as it would be difficult to plan for retirement without knowing how much you are likely to receive from your state pension and from what age.” 

While 26 per cent of UK working adults gave a number under £185, 20 per cent gave a figure above this and most (31 per cent) could not come up with a number.

The research also found one in four working adults have no idea what age they will start receiving their state pension.

Only 30 per cent claimed to know exactly what age they will start receiving their state pension. 

“It appears that many people don’t look into this until they are close to retirement, as a third of adults aged 18-54 don’t know what age they will start receiving their state pension,” LV said.

 

The majority of working adults do pay into a pension, with only 14 per cent not doing so.

However, nearly a quarter (23 per cent) of working adults do not know how much they are paying into their pension.

“Once again, this lack of knowledge makes planning for retirement more difficult,” said LV.

“One positive statistic is that a quarter of working adults are paying 15 per cent or more of their wage into a pension, which is a good step towards achieving a comfortable retirement.”

Another finding included in the report was that retirees’ finances are the least affected by the cost of living crisis.

Retirees were the group most likely to say they can currently comfortably afford day-to-day costs and bills.

While 60 per cent of retirees said this, nearly half (36 per cent) of 35-54 year olds could say the same. 

“Many retirees are actually being protected from many of the worst effects of the economic crisis, due to having lower outgoings, a good amount of savings and having paid off their mortgages,” said LV.

ruby.hinchliffe@ft.com