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11

One in five think they will miss out on state pension, poll finds

Open-access content Wednesday 5th November 2014 — updated 5.13pm, Wednesday 29th April 2020

Nearly a fifth (18%) of UK adults believe they will not qualify for the full flat rate state pension of £155 a week, which is due to come in into effect in 2016, life insurer Prudential revealed.

Nearly a fifth (18%) of UK adults believe they will not qualify for the full flat rate state pension of £155 a week, which is due to come in into effect in 2016, life insurer Prudential revealed.

From April 2016, the flat-rate state pension will be set above the basic level of means-tested support, currently £148.35 per week.

Until the end of the Parliament, the state pension will continue to be uprated by the 'triple lock' system, which increases the payment by whichever of annual earnings growth, inflation or 2.5% baseline is highest.

Prudential polled more than 1,000 people aged 55-plus, with 21% of women believing that they could miss out, compared with 14% of men. This gender difference means that women think they are less likely to make the equivalent of the 35 years of National Insurance contributions needed to qualify.

Nearly half (49%) said they will miss out because of career breaks to raise children, although 20% say they will not meet the target due to long-term illness.

Prudential noted that additional years could be bought in voluntary contributions for those who fail to clock-up the necessary 35 years in employment.

More than 25% of those polled are not aware of the state pension reforms. This figure rises to 53%, among the total adult population, the poll revealed.

On average, those surveyed believe it will be worth £125 a week, compared with the actual £155 a week. One in nine (11%) thought it would be £170 a week.

Tim Fassam, pensions policy expert at Prudential, said: 'The launch of the flat rate state pension in April 2016 is designed, in part, to make it easier for people to understand how much they will receive from the state, in turn enabling them to better plan for their retirements. But inevitably, due to the changes to the rules on eligibility, there will still be differences in what people receive.'

 

This article appeared in our November 2014 issue of The Actuary.
Click here to view this issue
Filed in:
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Topics:
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