Britons are not feeling very optimistic about the future of the state pension
Britons are not feeling positive about the future of the state pension.
Less than a third (32 per cent) of nearly 4,000 people surveyed for Aegon UK believe that the state pension will be as generous when they retire.
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Some 33 per cent, meanwhile, thought it would be less generous, and 10 per cent said they believed it would no longer exist.
Why the pessimism? A majority of those surveyed, between 29 February and 7 March, said they do not trust the current government to make fair decisions when it comes to reforming the state pension, and to strike a balance between pensioners and working-age people.
“Against a backdrop of almost continuous reform, it’s perhaps not surprising that just a third of people believe the state pension will be as generous when they come to retire,” Kate Smith, head of pensions at Aegon.
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“This wasn’t helped by the confusion surrounding the introduction of the new flat rate state pension with many reaching retirement finding they’re not entitled to the full pension of £155.65 per week. In an ageing society, the state pension is always going to be an expensive benefit to maintain, but it’s one we hope future governments will continue to support given that it underpins the majority of people’s retirement incomes.”
She added: “The stark reality is that for most people, the state pension alone will not offer them a comfortable retirement. Some may see it as a key societal safety net, and others as a key building block. Whatever your opinion, everyone deserves clarity on their expected entitlement so they can plan, and save to supplement this as necessary.”
A Department for Work and Pensions spokesperson said: “Our pension reforms reflect a bold move to create a simpler and fairer system, providing a firm basis from which people can plan their retirement.
“Along with the new state pension we have also introduced automatic enrolment for workplace pensions which is enabling over 6.4m people to start saving or save more for their future. We expect this number to rise to around 9m by 2018.”