Published On: Mon, Mar 23rd, 2020

State pension: Coronavirus is affecting the economy – will it affect retirement income? | Personal Finance | Finance

State pension is a crucial source of income for many people reaching their later years. The economic toll that coronavirus takes seems to only be getting worse, no doubt worrying many pensioners who have limited resources for income.

The only thing that will really affect a state pension’s payments is a national insurance record.

The amount a person receives from their state pension depends on how many years of contributions a person has.

A minimum of 10 will be needed for any income and 35 years will be needed for the full amount.

Currently, the most a person can receive from a state pension is £168.60 per week but this will rise in April.

The Money Advice Service detail that even if a person’s private pensions have been affected by the stock market movements they should still likely be ok in the long term.

As they detail: “If you’re currently paying into a workplace pension and have several years before your planning to draw on your pension, then you’re probably going to be ok. In time, it’s likely markets will recover, and it might even be a good time to consider increasing your pension contributions if you can.

“If you’re close to or considering retirement, many pension schemes will have seen their funds life styled. This means your pension will have been moved into predominantly less risky funds such as Cash, Gilts or Bonds.

“That doesn’t mean your pension won’t have taken a hit, but it should be considerably less than if you had remained invested in shares.

“If your pension is still invested mostly in shares, don’t panic. In time markets are likely to recover although depending on when you are planning to retire, you may have to consider taking a lower income or retiring later.”

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