A shocking 55% of people will not receive the full new state pension in the first five years.
The new state pension, set to begin in April 2016, was introduced to simplify the current system and will give a single payment of £150 per week to every pensioner.
However the news that only 45% of pensioners will receive this amount will be a nasty shock to those soon to retire.
People may not be receiving the full amount due to having gaps in their national insurance contributions.
If you haven’t paid enough in national insurance then find out about voluntary national insurance contributions on gov.co.uk. You can pay for any gaps in the past six years and possibly more, depending on your age.
Others may not get the full amount because they were ‘contracted out’ – this means they used a rebate of national insurance contributions to build a private or workplace pension. You are more likely to be contracted out if you work in the public sector.
The number of people who are entitled to get the full amount is expected to rise to 62% between 2021 and 2025 – although that still means 38% of people will not be receiving it! The amount of people getting the full amount is expected to be 81% by 2035.
After April 2017, people will have to work longer to qualify for the full state pension. They will need to have 35 years of National Insurance contributions instead of the 30 currently required.
If you’re in any doubt about how much you’ll receive, use this State Pension calculator to get a good idea of how much you should get when you retire.