State pension gender gap 'narrowing too slowly'

Men still receive an average of £28 more a week in state pension than women despite reforms starting to narrow the gap, analysis suggests.

A retired man typically receives £154 a week, compared to £126 a week for women, according to Which?.

The consumer group studied official data two years after the introduction of the new state pension.

One architect of the new pension said the gender gap would be effectively eliminated within a decade.

Nearly 13 million people in the UK receive the state pension.

"Many pensioners will be shocked by the differences in average payouts to men and women and those qualifying under the old and new systems. Some pay gaps will close eventually, but not soon enough for some," said Harry Rose, editor of Which? Money.

Simplification

The new state pension was introduced in April 2016 and has been paid to new pensioners since then. Existing pensioners continued under the old scheme.

The government's long-term aim is simplification, stripping away extras such as the second state pension, but it will also become cheaper, in time, for the government.

The system was also designed to halt penalties affecting the state pension of women who took career breaks to look after young children, the self-employed, or those who stopped work to become carers.

These groups now see credits on their National Insurance record that usually mean they qualify for the full state pension.

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The Which? analysis found that, among the 546,000 people who receive the new state pension, the typical man received £152 a week and the typical woman received nearly £144 - a gap of £8 a week.

The difference is primarily the result of millions of people still receiving add-ons to the basic state pension that they had built up during their working lives, such as the state second pension which was based on earnings.

When the reforms were introduced, the government vowed that nobody would lose any of the pension they had already built up.

'Radical change'

Former pensions minister Sir Steve Webb, who was heavily involved in the reforms, said that it may take another 10 years for the gap to be eliminated.

"The new state pension has been designed to treat men and women equally. Someone with 35 full years in the new system will get exactly the same pension, whether they are male or female," he said.

"But, in moving to the new system, it was necessary for transitional rules to honour the typically larger pensions that men had already built up by 2016, which explains the short-term differences in outcomes.

"This should not detract from the radical change which the new system brings, which will stop women being second-class citizens when it comes to state pensions."

The Department for Work and Pensions (DWP) said: "Around 650,000 women reaching state pension age in the first 10 years will receive an average of £8 per week (in 2015/16 earnings terms) more, due to the new state pension valuation of their National Insurance record.

"The statistics currently available on the new state pension are not yet sufficiently representative to draw robust comparisons between the old system and the new one."