State Pension  

Women receiving state pension £29k worse off than men

Women receiving state pension £29k worse off than men

Women will receive up to £29,000 less from their state pension than men over the course of a typical 20-year retirement, new research revealed.

Consumer group Which analysed Department for Work & Pensions (DWP) data to find the average man was receiving £153.86 a week in state pension, while the average woman got £125.98.

The analysis revealed a slight improvement from previous years, Which said.

The average payment received by women in August 2017 was 81.9 per cent of that received by men, up from 79.7 per cent in August 2015 and 77.7 per cent in August 2013.

Sir Steve Webb, director of policy at Royal London and the former pensions minister responsible for the new state pension, said the gap in the figures was largely because men who had built up larger entitlements under the old rules were having them honoured in the transition to the new system. 

He said: "But there should be no doubt that the new state pension system has already reduced inequalities and will progressively bring male and female outcomes into line. 

"Under the new rules, someone earning £7,000 per year builds up the same state pension as someone earning £70,000, and someone at home bringing up a young child builds up as much state pension as someone running a FTSE 100 company. 

"Reversing decades of inequality takes time, but the new system marks a major step forward."

Which identified that if individuals are getting their state pension under the old system - which existed until April 2016 - they could be worse off compared with new recipients.

Under the new system, announced in 2014, pensioners receive approximately £150 a week or more if they have paid up 35 years of full-rate national insurance contributions, compared to the previous threshold of 30 years.

Those who have qualified since the new system was introduced receive an average of £150.35 per week, compared with £137.81 under the old one.

This works out at a difference of £12.54 every week and adds up to £13,041 over a 20-year retirement.

There are 12.9 million people currently getting the state pension – that’s around a quarter of the adult population but these people fall into different categories which influences how much they get.

The main group of state pensioners is the 8.4 million people who receive basic and additional pension based solely on their own National Insurance contributions.

This group is 59 per cent male and 41 per cent female, with an average weekly pay-out of £142.22.

In many cases women in this group will have a lower pension because they may have taken a break from their career to have children.

But the DWP said the statistics currently available on the new state pension were not yet sufficiently representative to draw robust comparisons between the old system and the new one.

"This is because they only cover the period April 2016 to August 2017: in that period, only a few hundred thousand people have made new claims, whereas the statistics for the previous system are based on 12 million people," the government said.