New research has shown that staggeringly over 50% of the UK population is unaware of changes to the State Pension and more importantly how it will affect them.
Even more worryingly, the survey conducted by Met Life, found that 32% of 55 to 64 year olds, the next generation to retire, did not know the State Pension is about to change.
State Pension confusion
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The survey also revealed people are confused about the amount of income the State Pension will provide.
The flat rate State Pension will start in 2016 at £150 per week, but over half of those people survey, 57%, thought it would start at a lower level.
Despite underestimating the value of the State Pension, two-thirds of people believe it is important source of income in retirement, although only half know whether they will be better or worse off under the new system.
Work to do
The survey shows that the Government, as well as the wider pension industry, has a significant amount of work to do before 2016 to educate the public on the changes to the State Pension. Although it is interesting to note that women are more knowledgeable about the reforms than men.
Responding to the survey, Dominic Grinstead, Managing Director, MetLife UK, said: “The fact that just under half of those aged between 55 and 64 who are about to retire don’t understand whether or not they will be better off reflects the lack of knowledge people have about retirement.”
“People clearly attribute value to their state pension even if they underestimate how much it’s worth, MetLife advocates greater financial education for people across all ages and from all backgrounds so that they can make informed decisions regarding their financial security.”
