DWP State Pension figures emphasise need for private provision
26 November 2019
Over half a million pensioners are not receiving the full state pension, according to new figures from the Department for Work & Pensions.
The data shows that of the 1.1 million who receive the new state pension, only 44%, or nearly 500,000 people, receive the full amount. Around the same number receive at least three quarters of the whole amount. In comparison, around 65% of people who retired under the old system pre-2016 receive the full basic state pension.
The amount pensioners receive is dictated by the number of qualifying years on their National Insurance Record, with current rules stating that people must have 35 qualifying years to get the full new state pension.
Stephen Lowe, group communications director, Just Group (pictured), said the figures highlighted a continuing reliance upon private pension income to fund retirement.
Lowe said: “The pension ‘freedom and choice’ reforms were backed up by the promise that the new, higher state pension would be enough to provide a basic level of support if people did use up all their private pensions early.
“Putting aside the thorny question whether state pension alone can provide an adequate standard of living, the truth is that most people retiring since the reforms in 2016 do not even receive the full amount of state pension.”
Lowe said it raises concerns that the level of ‘safety net’ income provided by the government may be lower than people anticipate.
He added: “We would urge everyone approaching retirement to get a state pension forecast and to take advantage of the free, independent and impartial Pension Wise guidance on offer to ensure they understand their likely retirement income before they start accessing pension money early.”
What are the top skills employers typically want to see from a paraplanner? Lewis Byford, co-founder of financial services...
Are you signed up to the Professional Paraplanner daily website alert? For more technical, tax, pensions, investment, retirement, protection...
With £355 billion of debt having been accumulated in the past year and a potential £204 billion or more to be...