Nearly three in four think the state pension is enough to live on

Pension peanuts

Nearly three in four (73%) people think the state pension alone would enable them to live comfortably in retirement, according to The Pensions Advisory Service (TPAS) latest ‘Women and Pensions’ survey.

People who reach state retirement age on or after 6 April are eligible for the new ‘flat-rate’ state pension of up to £155.65 per week. For those who retired prior to 6 April, the basic state pension is £119.30 per week and they may also benefit from the additional state pension.

While the new flat rate pension sounds good on paper, there are many losers as well as winners. And experts, including Moneywise columnist Jeff Prestridge, have warned that people shouldn’t rely on the new state pension to fund their retirement.

At just over £8,000 a year, the new state pension is far short of the £17,100 that the Joseph Rowntree Foundation says a single person of working age needs to fully participate in society. This minimum income standard is based on what members of the public think people need to earn before tax to achieve a socially acceptable living standard.

The same study shows a pensioner couple needs £18,212 a year to meet the minimum income standard. So under the new state pension system, a couple would need private savings or pension income to achieve this level.


Pensions Minister, Baroness Ros Altmann, says: “The pensions landscape has changed rapidly over the last year and it is important that people understand what the changes mean for them. It is important that people of all ages start planning for the future – not just those nearing retirement.”

Most see pensions as complicated

The research also reveals that seven out of ten (71%) of respondents see pensions as complicated. Three in ten admitted they did not know how much state pension they will obtain, and the same number didn’t know how to acquire an estimate for this.

Further still, two out of five (43%) of those surveyed admitted they didn’t feel confident in making decisions about saving for their retirement. And fewer than one in ten (4.5%) respondents described pensions as trustworthy products.

This backs up Moneywise’s research, which found that over half of people (55%) don’t understand the new state pension.

TPAS says the government and the industry need to build consumer understanding in pensions, so people are able to be confident in making informed decisions. It adds that making pensions guidance compulsory and offering it sooner may be required.

Richard Graham MP and Chair of the All Party Parliamentary Pensions Group, says: “The pensions landscape has seen a lot of change. This research shows the impact these developments, including pension freedoms, are having on consumer behaviour.

“It’s clear that government must work closely with industry to ensure consumers get the advantages offered and avoid the pitfalls. Long term saving matters.”

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Why do writers of articles still give people the impression that the the new state pension  £155.65 has gone up fro the basic state pension of £119.90 which is only true for a person who has been self employeed all their life. 
You do mention that people could benefit from additional state pension in the small print but fail to mention  that the additional state pension can be more than the basic state pension and for a high easrner even more than the new state pension.
For most people their state pension in future is going to go down not up.
People who were contracted in stand to be worse of by about £2,000 to £3,000 per year depending on if the were low or high earners respectively according to a report done by the institute of Fiscall Studies.
Why don't you just say that most people will be worse offf in the future especially when you take into account loss of increases on part of a persons occupational pension know as Guaranteed Minimum Pension (GMP) . Potential loss of up to about £20,000. loss off inherited and derived rights and people with less than ten years NI not receiving anything.

Thank you for your feedback. We have amended the article slightly to make it clear that those who reached state pension age before 6 April will not receive the new state pension. 

We must remember the new state pension was introduced to save the government money so there must be more people getting less pension than getting more. It was NOT the giveaway that people believed when the Chancellor announced it in the Budget.  Add to that the increse in retirement age and it's bad for everyone!

For last week's poll, you stated that the new flat-rate pension would be UP TO £155.65. This week, you're saying it WILL ACTUALLY BE that amount. Again, as I responded last week, I think that's very misleading to your readers, many of whom WILL NOT receive that amount if they've been contracted out of SERPS at any time during their working lives - but, on reading your report, they WILL EXPECT that full amount as their State Pension (aside from any occupational pension/s).

Thanks for your feedback. You are absolutely right and we've amended the article accordingly.