Confusion rife over new state pensionUnderstanding of the state pension is falling

15 October 2016

State pension confusion

Many people don't know how much state pension they'll get or when they'll receive it

Understanding of the state pension is falling among those who will be affected by huge changes made earlier this year, new Which? research shows.

Six months after the biggest shake-up of the state pension system in decades, our survey of people aged 50-64 found that only 61% were even aware of the changes (down from 68% in February).

Many did not know when they would receive their pension, or how much it is. 

Confusion about state pension age

In November 2018, the state pension age will become 65 for both men and women, but 85% of people we surveyed either got the age wrong or simply didn't know it (up from 79% in February).

Those aged 60-64 were joint most likely (with the 50-54s) to think that they knew the correct age, but just one fifth of them got it right. 

Over time, the state pension age is set to increase to 66 (2020) and then 67 (2028) - use our state pension age calculator to see when you'll qualify for it.

On Thursday, John Cridland, who was appointed by the government to review the state pension age, launched a consultation setting out various options for retirement beyond 2028, considering changes such as increased life expectancy. 

One proposal is to recognise certain manual jobs that carry a greater risk of early death; another is to reward those who've made National Insurance contributions for more years than is usual. The consultation closes at the end of this year, and final recommendations are due next year.

How much is the state pension?

Only one third (35%) of people in our survey correctly identified the 'full' level of new state pension at £155.65. Nearly two thirds either didn’t know or opted for the wrong amount.

The full level of state pension is confusing because you may get more or less than £155.65, depending on how many years of full National Insurance contributions you've made and whether you were contracted out or not.

Find out more: how much state pension will I get? - the key facts explained

The changes still need to be explained

The new state pension system, which affects only those retiring on or after April 6 this year, aims to simplify how much people will receive and when they can claim it, but the rules on how much you will get are not straightforward. 

Our survey suggests that the government needs to do much more to highlight and explain the changes.

Harry Rose, Which? Money editor, said: 'The new state pension system is still complicated and our new research shows that more needs to be done to make sure that people understand what the changes are and what they mean for them. 

'We'll be sharing our findings with the government, and asking it to step up efforts to raise awareness, so that those affected can properly plan their retirement income.'

Which? surveyed 1,000 members of the public aged 50-64 about the state pension in September 2016.  

Find out more: what's happening to the state pension? - our video guide explains all you need to know

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