This month sees the new state pension come into place, heralding a genuine revolution in pensions and how they are calculated. The new pension rules have met with nothing but confusion, however, and this has been confirmed by a new survey conducted by expert consumer watchdog, Which? This is a summary of their findings.
The Which? Survey Findings
Which? surveyed 1000 people between the ages of 50-64.
- 44% of those surveyed found that they do not know the full rate of the new state pension
- Only one in five know that the new state pension age is now 65 for both sexes. Retirement age for women is being slowly increased so that by 2020 it will be 66 for both.
- Nearly one in two were unsure whether they can top-up their state pension or not.
The government has been savaged by MPs and watchdog groups over the confusion the new rules have brought. Many people are in for a shock when they discover their retirement incomes are significantly lower than they thought.
Richard Lloyd, executive director at Which? said:
“While it’s promising to see that awareness of the upcoming changes is high, we’re only half way there. More needs to be done to make sure that people understand what the changes are and what they mean for them.”
Less for those that Contracted Out
One of the key aspects responsible for creating widespread confusion is contracting out. If you have you will receive less than the full state pension. It is assumed that you would receive additional retirement income from contracting out.
The new state pension is based on your National Insurance (NI) contributions. If you have paid in for 35 years you will receive £155 per week when you retire, providing you have not contracted out during this time.
Pensions Minister Baroness Altmann and former Pensions Minister Steve Webb both claimed the new system will be easier to understand and fairer. As we can see, going by the public outcry and the results of the Which? survey, in both regards the new system is a failure.
Act Today and Secure your Retirement
If you are concerned about your retirement income you can get a rough idea of how much you will receive by clicking here and using the online pension calculator.
As an award winning financial planner, I can help you have a more secure retirement and provide you with clarity where your pension is concerned. Click here and complete the Call Back Service form in the first instance. It is time to make sense of the madness.
Source: Daily Mail