The State Pension
The state pension is one potential source of income in retirement. To qualify for a state pension you need to have made national insurance contributions, and the amount that you receive will depend on how many qualifying years of national insurance contributions you have made.
However, there are no rights to a state pension, and there is no contract, so a future Government could decide to stop the pension or change the rules
This makes planning difficult as assumptions have to be made about what sort of state pension there might be when you retire. We think it best practice to assume that the state package (however put together) will probably provide a pension set around the level at which significant social security benefits would kick in.
Our reasoning is as follows – generous pensions are expensive and probably not affordable by the Government, but nor do people like to think of pensioners living in poverty. This means that both very high, and very low, pensions will probably always be politically unacceptable, and therefore not happen.
For further information see the DWP website http://www.dwp.gov.uk/. Please note that by clicking on this link you will be leaving our regulated website, and we do not take responsibility for the accuracy of the linked website.
Last updated on April 06, 2012