Less than half to get full state pension

The flat rate state pension is set to come into force in April 2016 and aims to simplify the system by giving retirees a single payment of £148.50.

Approximately 3.5 million workers will reach their state pension age between 2016 and 2020. Of these, just 45% will be entitled to receive a full new state pension of at least £148.40.

Additionally, 30% of pensioners will get less than 90% of the new state pension, meaning that they will be entitled to a state pension income of no more than £133.56 a week.

The majority of people falling short of the full state pension are likely to have been contracted out during their working lives or have interrupted National Insurance contribution histories such as mothers and the self-employed.  

Tom McPhail, Head of Pensions Research at Hargreaves Lansdown, said:

"The new state pension will ultimately be a simpler and fairer system. However in the short term it will be complicated and many people are likely to get less than they may expect.

"With the new pension freedoms meaning that they will be free to spend all their private pension savings, it is imperative that they receive a proper state pension forecast. Without this, they could get a nasty shock when they do reach state pension age."