State pension alert as people born after 1961 may be wrong on vital fact

A new study has revealed that a fifth of people are unaware of the impending changes to the state pension age and how it will impact them. The current state pension age is 66, but it's set to rise sometime next year, with the gradual increase eventually reaching 67.

Those born between April 6, 1960, and March 6, 1961, will be most affected by this change. Lacking understanding of this increase could lead people to make significant financial decisions, such as paying off debts, resigning from their jobs or relocating, under the assumption that they'll soon receive their state pension payments, only to discover that it may be delayed by up to a year.

The WASPI campaign is advocating for women born in the 1950s who were not given sufficient notice of similar age changes that impacted them but despite information about upcoming state pension age changes being widely available, many remain alarmingly uninformed.

Research conducted by the found that only 60% could accurately identify when they'll be entitled to the state pension.

This figure was slightly higher for those due to receive the payments at age 66, before the next change. However, those directly affected by the change due next year were the least accurate.

59% of this age group were incorrect, with a staggering 42% believing they'll only get their state pension years later than they actually would.

The survey has uncovered that 12% of individuals mistakenly believed they would receive their state pension earlier than the reality, while 5% confessed to being clueless about when they'd qualify for the payments.

A concerning 22% of participants overall were under the impression they'd be eligible for state pension sooner than is actually the case.

Experts from the IFS cautioned: "Together this means that more than one in five people have knowledge gaps that can lead to them making possibly poor decisions about their savings or when they retire."

The research, which spanned 2021 to 2022 and focused on those born between 1955 and 1965, identified certain groups as being more prone to these misconceptions, including women, the self-employed, and low-income earners.

The experts added: "Some of those people may therefore be making these critical decisions based on incorrect assumptions about when they can start claiming the state pension. And for most, the state pension will represent a large part of their retirement resources."

In light of these insights, the IFS is recommending that the government send letters to individuals upon reaching their 50th birthday to clarify their prospective state pension age, thus arming them with crucial information well ahead of time and helping to avoid sudden significant alterations to the state pension age by the government.