Men receive up to £29k more than women in UK state pension

News


24 Apr, 2018

Men receive up to £29k more than women in UK state pension

Women in Britain are currently receiving £29,000 less than men, over the course of a 20-year retirement, according to Which?

New figures from the Department for Work and Pensions (DWP), reveal a considerable gap between the state pension income for men and women. On average, a man receives £153.86 a week, and a woman typically receives £125.98 a week. However, the DWP told Which? that the new state pension arrangement is reducing inequalities.
 
A DWP spokesperson noted: “Around 650,000 women reaching state pension age in the first 10 years will receive an average of £8 per week more (in 2015-16 earnings terms), due to the new state pension valuation of their National Insurance record.”

In August 2017, the average payment received by women 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.

The analysis highlights that women often have a smaller pension due to take time away from the paid work to raise children. Nonetheless, middle-to-high earning women who temporarily leave work to care for their children have also been reminded that it is necessary for those in this position to still claim child benefit in order to gain national insurance credit for their state pension.

While the gender gap is still there, Which?’s report does mention that the new state pension system has increased average weekly incomes. Those qualifying since the new system receive an average of £150.35 per week compared to £137.81 under the old one. This adds up to £13,041 over a 20-year retirement.

That said, only one in five of those receiving the new state pension are women. The DWP explained that this is due to the fact that “there is not an even spread of people reaching state pension age each month.

“The way that the equalisation of men’s and women’s state pension age has been phased has affected the dates when people reach their state pension age. Since April 2010, women’s state pension age has been gradually increasing to bring it into line with men’s.”

Of the reducing state pension gender gap, Steve Webb, Royal London director of policy noted: “Although these figures show a continuing gap between men and women in terms of state pension outcomes, this is largely because men who have built up larger entitlements under the old rules are having them honoured in the transition to the new system.

“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.”


Today's earlier news - deVere clients to receive up to 10.00% as Morgan Stanley 5y Autocallable Income Note Matures