Flat rate state pension causes confusion

A third of over 50s say they do not have a clear idea about whether they will be better or worse off under the new flat rate state pension, according to Saga.

The insurance provider surveyed 10,010 people aged 50 and over about the introduction of the flat rate pension system in April 2016 and how they feel the changes will affect them. The results show significant confusion about how the new system will work and the effects on people’s standard of living.

The key findings of the survey are:

• 25% think the new system will be generous

• 16% think they will definitely receive the new pension

• 33% think they will definitely not receive it

• 7% knew how to make extra national insurance top up payments to secure a better pension.

People will be eligible for the new state pension if they are a man born after 6 April 1951 or a woman born after 6 April 1953 who has at least 10 qualifying years on their national insurance record. The government hopes the new system will boost the retirement income of the low-paid and self-employed, who typically fair less well with the current system.

Commenting on the research, Saga’s Paul Green said:

“Our research shows great confusion about changes to the state pension. Whilst there are a minority of people who are savvy who know how to make the most of what is on offer, it should not just be for [sic] savvy few to benefit.

“The government needs to do much more to raise awareness of the ways that people can boost their state pension.”