Universal state pension system far from universally understood

Published  22 September 2021
   3 min read

Sarah Pennells, Consumer Finance Specialist at Royal London comments on the findings by the National Audit Office that over £1 billion worth of state pensions have been underpaid:

“The number of women affected and the amount underpaid are eye-watering. Women are more likely to rely on their state pension in retirement. So the fact that many thousands have missed out on money that’s rightfully theirs, because of mistakes and a complex system, is heartbreaking.

“Although the new state pension is designed to be simpler, it is not straightforward for everyone. People currently working will have built up some of their state pension entitlement under the old system, pre April 2016, and some under the new system. If they were contracted out of National Insurance, because they were in a final salary pension scheme, some of their state pension will be paid by their workplace pension – which they may not be expecting. The state pension may be universal, but it is far from universally understood. For those who need further guidance and support, the Money and Pensions Service is a good place to start.”