<\/p>\n
Over a fifth (22%) of retirees also said they entered retirement unaware of how much they\u2019d receive from the state pension, while a quarter (26%) didn\u2019t know how to calculate their entitlement. One in ten (10%) retirees also said they didn\u2019t realise that their National Insurance contributions determine the level of state pension paid in retirement. Another 10% of retirees said it wasn\u2019t easy to determine how much state pension they\u2019d receive in later life.<\/p>\n
Gaps in pre-retirement knowledge<\/strong> The study revealed that knowledge gaps have led to several misconceptions, the most prominent being that each person\u2019s National Insurance contributions are kept in a personal pot to be accessed when they reach state pension age when, in reality, it is funded on a pay-as-you-go system by current taxpayers[3]. This was a strongly held belief that impacted people\u2019s views about the fairness of the system.<\/p>\n Recent pension increases and future concerns<\/strong> It\u2019s worrying that many UK adults lack knowledge about specific state pension details, such as the value of their entitlements and when they qualify for payment. However, the state pension is a significant part of most people\u2019s retirement income, and it\u2019s clear that greater prominence and more accessible information are needed so people feel confident and can plan for their financial future.<\/p>\n What is the state pension?<\/strong> What is the current state pension amount?<\/strong> What is pension credit eligibility?<\/strong> Government resources such as the state pension forecast are invaluable tools that can provide a clearer picture of what you might receive. Engaging with these resources early and regularly can prevent unwelcome surprises. Given the state pension\u2019s central role in retirement income for many, it is critical to ensure you have all the relevant details. This proactive approach not only aids in better financial management but also offers peace of mind as you approach retirement age.<\/p>\n When can I receive the state pension?<\/strong> If you don\u2019t want to take your state pension immediately, you can also choose to defer it. This means you could get larger payments when you do start claiming it, which might suit you depending on your circumstances.<\/p>\n How do I claim my state pension?<\/strong> When will the state pension be paid?<\/strong> Will the state pension be enough?<\/strong> Because it only starts in your late 60s, it won\u2019t help to support you if you want to retire earlier. It should, therefore, only form part of your overall retirement plan, and so it\u2019s important to fully understand how much you might need to save in your personal or workplace pension plan to be able to afford the retirement you want.<\/p>\n Source data:<\/strong> THIS ARTICLE DOES NOT CONSTITUTE TAX OR LEGAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH.<\/p>\n A PENSION IS A LONG-TERM INVESTMENT NOT NORMALLY ACCESSIBLE UNTIL AGE 55 (57 FROM APRIL 2028 UNLESS THE PLAN HAS A PROTECTED PENSION AGE).<\/p>\n THE VALUE OF YOUR INVESTMENTS (AND ANY INCOME FROM THEM) CAN GO DOWN AS WELL AS UP, WHICH WOULD HAVE AN IMPACT ON THE LEVEL OF PENSION BENEFITS AVAILABLE.<\/p>\n YOUR PENSION INCOME COULD ALSO BE AFFECTED BY THE INTEREST RATES AT THE TIME YOU TAKE YOUR BENEFITS.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" What payments can you expect to receive from the government later in life? In\u00a0April 2024,\u00a0the state pension rose by 8.5% to \u00a311,502.40 a year for post-2016 retirees. However, according to new research[1], one in seven (14%) retirees receive less money from the state pension than expected. This highlights the need for more information about the… Read more »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[229],"tags":[],"_links":{"self":[{"href":"https:\/\/teessidefinancial.com\/news\/wp-json\/wp\/v2\/posts\/4755"}],"collection":[{"href":"https:\/\/teessidefinancial.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/teessidefinancial.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/teessidefinancial.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/teessidefinancial.com\/news\/wp-json\/wp\/v2\/comments?post=4755"}],"version-history":[{"count":0,"href":"https:\/\/teessidefinancial.com\/news\/wp-json\/wp\/v2\/posts\/4755\/revisions"}],"wp:attachment":[{"href":"https:\/\/teessidefinancial.com\/news\/wp-json\/wp\/v2\/media?parent=4755"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/teessidefinancial.com\/news\/wp-json\/wp\/v2\/categories?post=4755"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/teessidefinancial.com\/news\/wp-json\/wp\/v2\/tags?post=4755"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nThe research also shows there is a wide knowledge gap among those in the key pre-retirement age group[2]. Over a fifth (22%) of over 55s who are not yet retired do not know their state pension age, and just three in ten (29%) of this age group know how much the state pension is worth. Additionally, the research found that the understanding of the state pension system is poor across all ages, with participants struggling to explain basic aspects of how the system works.<\/p>\n
\nThe state pension remains a hot topic. Under the triple lock, while the increase in pensioners payments in April is a welcome boost for millions, concerns about its sustainability for future generations have been raised.<\/p>\n
\nThe state pension is an amount paid to you every four weeks by the government once you reach state pension age. However, not everyone can get the full state pension, which might not be enough to live on alone. Therefore, it\u2019s important to know what yours might be when you can claim it and how it will stack up with your other retirement savings.<\/p>\n
\nThe current full state pension amount is \u00a3221.20 a week for the 2024\/2025 tax year, totalling \u00a311,502.40 for the year, an increase of 8.5% from the previous tax year. Remember that the amount you\u2019ll get depends on your National Insurance record and how many qualifying years you have. You\u2019ll usually need at least ten qualifying years on your National Insurance record to get any state pension.
\nYou\u2019ll need 35 qualifying years to get the new full state pension if you don\u2019t have a National Insurance record before 6 April 2016. In some circumstances, it\u2019s possible to top up your National Insurance record, and your state pension forecast will highlight when this is an option.<\/p>\n
\nIf you\u2019ve reached state pension age and you\u2019re on a low income, it\u2019s worth checking if you\u2019re eligible for pension credit. This tax year (2024\/25), pension credit usually tops up your weekly income to \u00a3218.15 if you\u2019re single or your joint weekly income to \u00a3332.95 if you have a partner. Arming yourself with accurate information about your state pension is essential for effective retirement planning. Understanding how your National Insurance contributions affect your entitlement can help you make informed decisions about topping up your record or exploring additional retirement savings options.<\/p>\n
\nUK adults can currently receive the state pension from age 66, but this is set to rise to 67 by 2028 and again to 68 between 2037 and 2039. You can use the Government\u2019s calculator to check when you\u2019ll reach state pension age.<\/p>\n
\nYou won\u2019t get your new state pension automatically – you must claim it. You should get a letter no later than two months before you reach state pension age outlining what you need to do. If you have not received an invitation letter but are within three months of reaching your state pension age, you can still make a claim, and the quickest way to do this is online.<\/p>\n
\nAfter you\u2019ve made a claim, you will receive a letter about your payments. These are usually paid every four weeks into an account of your choice, and you are paid in arrears. The payment day depends on your National Insurance number, although you might be paid earlier if your normal payment day falls on a bank holiday.<\/p>\n
\nThere\u2019s a significant gap between what you receive from the state pension and what you may need or want in retirement. The state pension alone falls short of even a minimum standard of living in retirement, according to the Pensions and Lifetime Savings Association (PLSA).<\/p>\n
\n[1] Boxclever conducted research among 6,350 UK adults for Standard Life. Fieldwork was conducted 26th July \u2013 9th August 2023. Data was weighted post-fieldwork to ensure the data remained nationally representative on key demographics.
\n[2] Phoenix Group research, January 2024. Survey conducted by Opinium among 2,000 UK adults.
\n[3] Phoenix Insights (2023) An intergenerational contract: Policy Recommendations for the future of the State Pension<\/em><\/p>\n