The ‘concerning’ knowledge gap in the field of the state pension means that retirees are left with less than expected

Lack of knowledge about the AOW means that retirees receive less AOW than they expected, an expert has warned.

After the confirmation of the triple lock, the state pension rose by an inflation-breaking 8.5 percent.

Since April, pensioners on the full new state pension have been getting £221.20 a week or £11,502.40 a year and those on the full basic pension now get £169.50 a week – or £8,814 a year.

However, Standard Life, part of the Phoenix Group, has stressed that information about the payments people can expect from the government later in life must be made more accessible, as 14 per cent of pensioners receive less money than expected.

Patrick Thomson, head of research analysis and policy at Phoenix Insights, said: “Knowing how much you will get from the state pension, and when, is a vital part of retirement planning, with many relying on these payments to form the basis of their retirement. their retirement income.

‘It is worrying that a significant proportion of the population lacks understanding in this area, especially for those who are rapidly approaching retirement age.

‘We need to close this knowledge gap, so that people know what support they will receive from the state in addition to any additional pension savings, such as a company pension.

“This full picture allows people to plan ahead and start closing their savings gaps.”

Research from Standard Life found that more than a fifth (22 percent) of retirees said they retired without knowing how much they would receive from the state pension, while a quarter (26 percent) did not know how to calculate their entitlement .

One in ten also said they did not realize that their national insurance contributions will determine the amount of state pension they will pay out in retirement, and a further 10 percent said it was not easy to find out how much state pension would receive them later in life. .

Dean Butler, managing director of retail at Standard Life, explained that while the 8.5 per cent increase was a welcome boost for millions of people, concerns have been raised about its sustainability for future generations.

With this level of debate and some complex rules and terminology, it is understandable that a significant proportion of British adults do not know specific state pension details, such as the value of their entitlements and when they are eligible for payment.

Butler said: “The state pension is a significant part of most people’s retirement income and it is clear that greater awareness and more accessible information is needed so that people can feel confident and plan for their financial future.”

Phoenix Group’s longevity think tank, Phoenix Insights, found that understanding of the state pension system is poor across all ages, with participants struggling to explain basic aspects of how the system works.

More than a fifth (22 percent) of over-55s who have not yet retired do not know the state pension age and only three in ten (29 percent) of this age group know how much the state pension is worth.

To help break through these complex ideals, Butler outlined the necessary information about the state pension:

What is the state pension? The AOW amount is an amount that the government pays out every four weeks as soon as someone reaches the AOW age. However, not everyone can receive the full state pension. He said: ‘It may not be enough to live on on its own, so it’s important to know what yours is, when you can claim it and how it will compare with your other pensions. retirement savings.”

What is the current AOW amount and what influence does National Insurance have on this? The current full state pension amount is £221.20 per week for the 2024/2025 tax year, £11,502.40 for the year, an increase of 8.5 pents on the previous tax year.

Butler added: “It’s worth bearing in mind that the amount you get will depend on your national insurance details and the number of qualifying years you have. You will normally need at least ten qualifying years on your national insurance record to receive a state pension. You will need 35 qualifying years to receive the new full state pension if you do not have a National Insurance record before 6 April 2016.

“Under certain circumstances it is possible to top up your national insurance, and your state pension forecast will indicate when this is an option.

“If you have reached state pension age and have a low income, it is worth checking whether you are eligible for a pension discount. This tax year, (2024-25), the Pension Credit will typically increase your weekly income to £218.15 if you are single, or your joint weekly income to £332.95 if you have a partner.”

Woman worried on laptop

Some people might find that they get less than expected for their state pension


When can I receive the AOW pension? British adults can currently receive the state pension from the age of 66, but this is expected to rise to 67 in 2028 and again to 68 between 2037 and 2039.

Britons can use a pension calculator to find out when they will reach state pension age. If they do not want to withdraw their AOW pension immediately, they can also choose to postpone this. This means people can get bigger payments when they go to claim them, which may suit them depending on their circumstances.

How do I apply for my AOW? said Butler: “You will not automatically receive your new AOW benefit, you have to apply for it. You will receive a letter stating what you need to do no later than two months before you reach the AOW age.”

If you have not received an invitation letter, but you are within three months of reaching your state pension age, you can still submit an application. The fastest way to do this is online. To complete your claim you will need the following information:

  • the date of your most recent marriage, registered partnership or divorce
  • the dates of the time you lived or worked abroad
  • the details of your bank or building society
  • the invitation code from the letter about obtaining your AOW

When will the AOW pension be paid to me? The payment day depends on a person’s social security number, although payment may be made earlier if the normal payment day falls on a holiday.

Last 2 digits of NI number – Payday of the week

  • 00 to 19 – Monday
  • 20 to 39 – Tuesday
  • 40 to 59 – Wednesday
  • 60 to 79 – Thursday
  • 80 to 99 – Friday

Will the state pension be sufficient to finance my retirement? Butler said: ‘The reality is that there is a significant gap between what you get from the state pension and what you actually need or want when you retire.

According to the Pensions and Lifetime Savings Association (PLSA), the state pension alone does not meet the minimum standard of living in retirement. Since it doesn’t take effect until you’re in your late 60s, supporting you if you want it won’t help. retire earlier.

“It should therefore only be part of your overall retirement plan, and that is why it is important to fully understand how much you may need to save in your personal or business retirement plan to potentially afford the retirement you want. To give you an idea, try this use a retirement calculator so you can see if you’re on the right track.”

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