State pension income can be claimed by those who have at least 10 years of National Insurance contributions under their belts and have reached state pension age, which is currently sitting at 66. These payments often make up a crucial part of retirement plans but today, new research was released that shows thousands of people could be missing out entirely.
LCP, the independent pension management and consultancy company, released its “The Mystery of the Missing Pensioners” report which examined state pension withdrawal rates.
The report examined statistics for the British resident population and the number of people drawing a state pension and on this, a “discrepancy” was found.
LCP detailed that according to the latest population estimates there are 8.78 million people in Great Britain aged seventy or over, but only 8.53 million are receiving a state pension, a difference of a quarter of a million people.
Specifically, this affects around 97,000 for men and 155,000 for women.
The report acknowledged there could be “several legitimate” reasons why not everyone aged 70 or above would be expected to be getting a state pension, such as long-term deferrals, major NI gaps and receipt of other state benefits.
However, it was highlighted that these reasons “only explain a fraction of the ‘missing’ quarter of a million pensioners.”
Similar figures were found for those aged 80 and over, with 107,000 people in this age bracket (65,000 women, 42,000 men) getting no state pension.
Steve Webb, a Partner at LCB, commented on these figures: “It is shocking that there are so many older people who are getting no state pension at all.
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“In particular, when we have a special state pension payable to those over 80 which does not depend on National Insurance contributions, it is hard to understand why over 100,000 people over 80 are still on zero pensions.
“The Government needs to do much more to identify those who are on zero state pensions and to make sure that they draw the pension to which they are entitled.”
Additionally, Kay Ingram, a Public Policy Director at national financial planning group LEBC, responded to the report.
She said: “Unfortunately, as the research by LCP shows, too many people are not claiming their state pension due to misunderstandings as to what they are entitled to.
Kay concluded by also calling on the Government to take action: “For increasing numbers approaching retirement, the state pension scheme is an important component of their retirement income.
“The DWP should make greater efforts to educate consumers about their rights to the pension and what they can do to improve it.
“A proactive campaign which targets those groups most likely to be missing out on state pension is needed.
“The Government cannot leave it to financial planners and charities to make people aware of their entitlement and how to improve it.”