A significant number of UK adults feel uncertain about what they’ll receive as part of the state pension and when payments will begin, including many of those who are approaching retirement age.
According to research from Standard Life’s Retirement Voice report, a quarter (24 per cent) of people admitted they were not aware of the state pension age, including one in 10 (10 per cent) of those aged between 55 and 64.
Meanwhile, 22 per cent do not know how much they would receive from the state pension, rising to 29 per cent among 55 to 64-year-olds, while 20 per cent of those aged 65 and over are also unsure about this.
Dean Butler, managing director for retail direct at Standard Life, part of Phoenix Group, said: “The state pension is set to rise by 8.5 per cent next April and remains an important part of most people’s retirement plans, but many are confused on the detail.
“Knowing when you’ll start to receive the state pension and how much you’ll get is an important part of preparing for later life as it indicates how much you’ll need to save in your private pension to meet your expected standard of living in retirement and to be able to retire when you want to.”
Standard Life’s research, conducted among more than 6,000 people, found consumers were in the dark about other details of the state pension.
Over a third (38 per cent) do not know how to calculate their state pension entitlement and 37 per cent do not know what the current value of payments from the state pension are.
A quarter (25 per cent) don not know that their national insurance (NI) contributions determine the level of entitlement they will get via their state pension in retirement.
Butler said: “Being aware of your state pension entitlement and how NI contributions determine the amount you'll receive could also help to avoid any nasty shocks when you reach state pension age.”
The state pension is an amount paid every four weeks by the government once an individual reaches state pension age.
The current full state pension amount is £203.85 for the 2023/2024 tax year.
Butler said: “It’s worth keeping in mind that the amount you’ll get depends on your NI record and how many qualifying years you have.
“You'll usually need at least 10 qualifying years on your NI record to get any state pension. You’ll need 35 qualifying years to get the new full state pension if you do not have a NI record before April 6, 2016.”
State pension payments
| New State Pension | Basic State Pension |
2023/2024 | £203.85 per week | £156.20 per week |
2022/2023 | £185.15 per week | £141.85 per week |
2021/2022 | £179.60 per week | £137.60 per week |
2020/2021 | £175.20 per week | £134.25 per week |
sonia.rach@ft.com
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