About Us Consumers Advisers Employers Media
| Why have a pension? | |
| State pension provision | |
|
Can I rely on state benefits? |
| Types of pension | |
| We're living longer | |
| How much will I need? | |
| When should I start saving? | |
| Women and pensions | |
| How a pension works | |
| Our individual pensions | |
| Our group pensions | |
| Investment for consumers | |
| Why Scottish Life? |
You are not logged in.
Consumer > Why have a pension? > Can I rely on State benefits alone?
Can I rely on State benefits alone?
Although retirement income paid by the State increases each year, it is actually falling relative to average earnings. This means that compared to those of working age, pensioners are becoming an increasingly poor section of society.
An example of how the real value of State benefits have fallen is to compare the Basic State Pension with average earnings. In 1987, the Basic State Pension was more than 20% of average earnings.* In 2006 it was approximately 15.5% of average earnings for a single pensioner and under the current system of price indexation, by 2050-51 this would become just 6.5% of average earnings.** (The Government has proposed re-introducing a link to earnings (subject to affordability), possibly from 2012. Security in retirement: towards a new pensions system, May 2006.)
The Government has also indicated that it would like to see the proportion of retirement income from private pension provision increase to help supplement State benefits.
You can get a forecast of the State Pension you have already earned and which you can expect to receive at the State Pension Age by visiting the Government's Pension Service website.
*Source: NAPF March 2008
**Source: PMI News, August 2006
Back to top 
Legal Disclaimer
© Scottish Life, St Andrew House, 1 Thistle Street, Edinburgh, EH2 1DG.
Scottish Life is a division of Royal London and markets products produced by Royal London. Royal London consists of The Royal London Mutual Insurance Society Limited and its subsidiaries. The Royal London Mutual Insurance Society Limited provides life and pension products, is a member of the Association of British Insurers and is authorised and regulated by the Financial Services Authority, registration number 117672. Royal London Marketing Limited acts as an insurance intermediary for general insurance products and is authorised and regulated by the Financial Services Authority, registration number 302391.
