- Research commissioned by AJ Bell highlights low understanding of the ‘new’ state pension among Brits, ten years after its introduction on 6 April 2016
- Just one-in-ten (12%) described their knowledge of the state pension as ‘excellent’, compared to one-in-five (20%) who said it was ‘poor’*
- Worryingly, only a quarter (25%) correctly identified you need a 35-year National Insurance record to qualify for the full state pension and 43% couldn’t even make a rough guess at how much the state pension is worth
- The state pension age is rising from age 66 to age 67 from this month until March 2028, creating the risk of further confusion...
- ...although most people think that won’t be the end of state pension age increases
Tom Selby, director of public policy at AJ Bell, comments:
“A decade on from landmark reforms designed to simplify the state pension system and millions of Brits remain utterly confused about how the rules work, how much they can expect to receive from the state in retirement or when they will receive it. Just one-in-ten, the equivalent of 6.8 million Brits, were confident enough to describe their state pension knowledge as ‘excellent’, while roughly 11.3 million Brits admitted their understanding was ‘poor’.
“When quizzed on the key elements of the state pension, just 19% correctly identified the state pension age as 66, while 40% thought it had already risen to age 67 and 12% mistakenly thought it was still age 65. Given the state pension age is rising to 67 between now and 2028, and again to 68 between 2044 and 2046, this confusion is likely to get worse before it gets better. When it comes to how much the state pension is worth per year, approaching half (43%) of respondents admitted they had absolutely no idea.
“Although people often aren’t sure of the precise details around how much they’ll get and when, they are confident of one thing: state pension age is only going up. Nearly two-thirds (64%) think it will rise beyond the already-scheduled increase to age 67. Further increases to state pension age are certainly a possibility, with a rise to 68 already on the cards, albeit not for another 20 years. A lot could change between now and then so we could see further increases and an accelerated timetable, although any change would need to be planned and publicised well in advance.
“There are a number of reasons that could explain Brits’ foggy understanding of the state pension basics. For those who are younger, more immediate financial needs will likely take priority and how the state pension works today might feel immaterial given it is likely to change completely when they become entitled to the benefit. The transition from the ‘old’ to the ‘new’ state pension will also take decades and people’s entitlements will vary as a result, potentially contributing to the low proportion of people (15%) correctly identifying the full new state pension is worth between £12,000 and £13,000 per year. The shift to the new state pension, combined with increases in the state pension age, may also have contributed to the lack of clarity about how the system works.
“Regardless of the reasons, for government these findings should be worrying, as a population which doesn’t understand how the state pension works are less likely to build a private pension that will sustain them through retirement. Ensuring more people understand what the state will provide in retirement and therefore how much they need to set aside themselves is absolutely critical. As part of this, policymakers need to prioritise stability in the wider pensions system, both in terms of state pension policy and the tax rules affecting millions of people building their own pot. This should include a long-term roadmap for both state pension reform and a commitment to maintain key pension tax incentives, namely tax-free cash and upfront tax relief, for the long term.
“For people saving for retirement, understanding the foundation the state will provide and the limitations in the standard of living that will deliver is crucial. For anyone aspiring to more than a basic living standard in their later years, building a decent private pension to complement your state entitlement - taking advantage of any employer contributions available, tax relief and tax-free investment growth - will be essential.”
*Based on a nationally representative survey of 2,000 people carried out by Opinium for AJ Bell between 20 and 24 March 2026.
