Over 11 million Brits don’t know how the state pension works (Image: Getty)
More than 11 million Brits don’t understand the ‘new’ state pension, it has been revealed, despite it being over 10 years since its introduction in 2016.
New research commissioned by investment platform AJ Bell highlights the low understanding of the state pension among Brits. Just one in 10 (12%) described their knowledge of the state pension as ‘excellent’, compared to one-in-five (20%) who said it was ‘poor’. This equates to about 11.3 million Brits. Only a quarter (25%) knew that you need a 35-year National Insurance record to qualify for the full state pension, and 43% couldn’t even make a guess at how much the state pension is worth.
The state pension age will start its gradual rise from 66 to 67 from this month until March 2028, creating the risk of further confusion, although most think this won’t be the end of state pension age increases. Tom Selby, director of public policy at AJ Bell, told Express.co.uk: “There is significant work for the Government to do when it comes to improving understanding of the state pension.
“That needs to begin with policymakers setting out a clear long-term trajectory for both the age you can receive the state pension and the value of the benefit – including explaining what the triple-lock is aiming to achieve and ultimately when it will end. That will be a difficult political nettle to grasp, but the longer the Government waits, the more painful it will be.”
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Younger people didn’t know about state pensions due to more pressing financial concerns (Image: Getty)
When quizzed on the key elements of the state pension, just 19% correctly identified the state pension age as 66, while 40% thought it had already risen to age 67, and 12% mistakenly thought it was still age 65.
Nearly two-thirds (64%) think the state pension age will rise beyond the already-scheduled increase to age 67.
Mr Selby said: “There are a number of reasons that could explain Brits’ foggy understanding of the state pension basics.
“For those who are younger, more immediate financial needs will likely take priority and how the state pension works today might feel immaterial, given it is likely to change completely when they become entitled to the benefit.
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“For the Government, these findings should be worrying, as a population which doesn’t understand how the state pension works is less likely to build a private pension that will sustain them through retirement. Ensuring more people understand what the state will provide in retirement and therefore how much they need to set aside themselves is absolutely critical.”
For people saving for retirement, Mr Selby said understanding the foundation the state will provide and the limitations on the standard of living that will be delivered “is crucial”.
He added: “For anyone aspiring to more than a basic living standard in their later years, building a decent private pension to complement your state entitlement – taking advantage of any employer contributions available, tax relief and tax-free investment growth – will be essential.”
Caroline Abrahams CBE, charity director at Age UK, told Express.co.uk: “These new figures are concerning and show a clear awareness gap. We understand no one wants to think about years down the line when they might be struggling right now, but it’s worth knowing the facts so it can inform decisions and help improve your chances of financial security in later life.
“The state pension is the main source of income for lots of pensioners, so understanding what you’re on track to receive is essential.
“Taking a few minutes to check your National Insurance record and getting a forecast can make a big difference – whether that’s identifying gaps, boosting your entitlement, or simply planning with more certainty. It’s very easy to check your expected State Pension Age, and you can also get a State Pension forecast. If you haven’t looked into it already, now is the time.”
What is the state pension?
State pensions are distributed by the Department for Work and Pensions (DWP) (Image: Getty)
The state pension is a benefit distributed by the Department for Work and Pensions (DWP) to people of a certain age who claim it, and how much you get depends on the year you were born and the number of ‘qualifying years’ of National Insurance (NI) contribution years you have.
People accumulate NI years through active employment or by receiving National Insurance (NI) credits, which are granted during periods of unemployment, illness, or while fulfilling parental or caregiving responsibilities.
There are two types of state pension, the new state pension and the basic state pension, and the type you receive depends on the date you were born.
Both state pension rates increase every year in line with the “triple lock” pledge. By honouring the triple lock, the highest percentage out of three different values is used to determine the rate increase.
The three values include:
The inflation rate in the previous September’s Consumer Price Index (CPI)The average recorded wage increase from May to July of the previous year2.5%.
The rise comes into effect from April 6, which is the first day of every new tax year in the UK.
The new state pension
How much state pension you recieve depends on an array of factors (Image: Getty)
The “new” state pension is available to:
Men born on or after April 6, 1951Women born on or after April 6, 1953.
To receive any state pension rate, people must have at least 10 qualifying NI years on their NI record. Usually, to get the full rate, a person should have at least 35, but this number can vary.
The full weekly rate for the new state pension for the 2026/27 tax year is:
Full new state pension: £241.30 (around £12,547 per year).
The basic state pension
The basic state pension is available to:
Men born before April 6, 1951Women born before April 6, 1953.
The full weekly rate for the basic state pension for the 2026/27 tax year is:
Full basic state pension: £184.90 (around £9,614 per year).
It should be noted that many people who receive the basic state pension can qualify for an “additional” state pension, also known as the State Earnings-Related Pension Scheme (SERPS). This increases every year based on inflation.
Subsequently, it’s claimed that in some cases, pensioners who receive SERPS can be better off than those on the new state pension. An analysis by Money Mail in 2024 showed that older retirees in their 80s and 90s can receive up to £20,176 annually, which is much higher than the new state pension rate.
How to check your state pension forecast
People can find out the earliest age they can claim the state pension by using a helpful tool on the Government website.
The tool can help people check a number of key things, such as:
When they’ll reach state pension ageThe Pension Credit qualifying ageWhen they’ll be eligible for free bus travel.
To use the service, people will need to prove their identity using the Government Gateway. People can register for Government Gateway if they have not used it before.
How to check National Insurance ‘qualifying years’ record
Most people will need around 35 years of contributions to receive the full new state pension, but some may need more.
Those who have gaps, which may have occurred when credits weren’t claimed, can increase their state pension by purchasing additional NI years to fill these gaps.
People can see if they’d benefit by checking their National Insurance record and state pension forecast on the GOV.UK website.
HM Revenue and Customs (HMRC) and the Department for Work and Pensions (DWP) also offer an online state pension forecast service to help people calculate if they’ll benefit from making voluntary contributions.
While it may be beneficial to plug gaps for some people, it may not be for others.