The New State Pension On The Horizon
How much do you know about the new state pension?
In less than 15 months' time the UK state pension system will undergo its most radical overhaul in decades. Unless you have reached the moving target that is state pension age by 5 April 2016, your existing entitlements to:
the basic state pension; graduated pension; state earnings related pension scheme (SERPS); and state second pension (S2P) will be replaced on 6 April 2016 by a "Foundation Amount" under the new single tier pension. The calculation of the Foundation Amount is complicated. It could amount to more than the state pension benefits you have earned up to that date, but it can never be less.
Late last year the Department for Work and Pensions (DWP) launched a "new multi-channel advertising campaign" aimed at explaining the new system. In research published alongside the campaign launch material the DWP revealed only 22% of those questioned agreed with the statement that "I know how the changes to the State Pension will affect me, if at all".
When asked whether anyone already getting a state pension would see the amount change as a result of the new state pension reform, 44% (wrongly) believed there would be a revision. Of those aged 65 and over, 37% said their pension would change.
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