A Freedom of Information (FoI) request has revealed that only 33 per cent of UK pensioners currently receive the full state pension. Moreover, 38 per cent of claimants, which is equivalent to 365,290 people, receive less than £150 per week, while only 29 per cent, equating to 282,447 pensioners, receive more than this amount.
Under the new pension system, announced by the Department for Work and Pensions (DWP) in 2014, pensioners should receive £168.90 per week. The state pension flat rate is also affected by a triple lock, which means that payments increase annually, depending on the consumer price index, average earnings growth or 2.5 per cent, whichever is highest.
People are eligible for the full flat rate state pension if they have paid full rate National Insurance Contributions (NICs) for at least 35 years. If their NIC record is incomplete, or if they have paid in for less than 35 years, they may receive less.
However, they can also receive more than the full pension if they have a ‘protected payment’, as benefits built up over the old and new system are worth more than the new flat rate.
As one commentator remarked, the state pension is the foundation of most people’s retirement plans, and yet the data received under the FoI shows that more than half the eligible claimants under the new flat rate system receive less than the full amount.
He added that it is unsurprising that many people find the system difficult to understand, given the changes that have been introduced over the years, so it would be sensible for them to get a forecast of what they are likely to receive and to seek professional advice if they are to make the most of their retirement.
Andrew Hennah, Financial Planning Director at Milsted Langdon said: “The research shows that a significant portion of pensioners are missing out on the full state pension due to the complexities of the current system.
“Contact our expert team today to find out how we can help you prepare for your financial future in the best possible way.”