According to the latest edition of Aviva’s Real Retirement Report, many are unaware or confused about changes that may affect their entitlement to a state pension.
The latest Real Retirement report from Aviva examines over-55s’ attitudes to the state pension and its importance to them, as well as their understanding of changes in progress to the state pension system.
It reveals 98% of over-55s feel the universal state pension is important to UK society, while 80% of recipients feel it is important to planning their own individual retirement finances.
However, almost one in three would not be able to cover basic living costs without it, while a further 27% would find this difficult.
Our experience is that women are more likely than men to rely on the state pension, and this is confirmed by the Aviva research.
60% of women feel it is very important to their individual finances compared to 46% of men.
68% of female recipients of the state pension would struggle to cover day-to-day costs without it compared with 51% of male recipients.
But despite its importance, Aviva’s research found worrying signs that many over-55s are confused about, or completely oblivious to, the changes being made to the state pension system, even though its launch is only a few months away.
Barely two in three are aware of the new ‘flat-rate’ state pension that will launch on 6th April 2016.
Almost a third of those age 55-64, who will receive their state pension for the first time under the new rules from next April, are completely unaware of the changes. This equates to around 2 million people.
There is also a lot of confusion about who is and who is not affected by the changes to the state pension rules.
One in six over 75s, who are already in receipt of the state pension under current rules, think they will receive the full flat-rate state pension.
A further 26% of over-75s are unsure as to whether they will get the new flat-rate state pension, despite being at least ten years older than the qualifying age for the new state pension scheme.
Among those 55-64 year olds who will qualify for the new flat-rate state pension, 42% are unsure if they will get this full payment.
Do you know about the new flat-rate state pension? If you are entitled to receive this from next April onwards, do you know how much you will receive?