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Pensioners ‘to gain’ from new state pension but younger people ‘worse off’

Many pensioners will receive a boost from the new State Pension in the next few years following its introduction in April, Government research has revealed.

Under the ‘flat-rate’ system, new retirees could receive up to £155.65 per week, compared to the current total of £119.30.

The Department for Work and Pensions (DWP) has calculated that, during the first 15 years, 75% of pensioners will receive more from the new State Pension than they would if the old pensions system had still been in place.

The research suggests that retirees will typically be £10 a week better off.

However, the Government data also revealed that nearly 16 million people aged 43 or under will, in fact, be worse off as a direct result of the new flat-rate State Pension.

While people who retire before 2040 will be better off, those who retire after this point are expected to lose out.

According to DWP figures, individuals currently aged 43 will receive £572 a year less, or £17,160 over the course of a 30-year-retirement, than they would have done under the current system.

An even higher proportion of savers currently in their 20s and 30s stand to lose out under the new flat-rate pension.

Additionally, the Work and Pensions Committee has launched an ‘inter-generational fairness’ inquiry as fears arose regarding the favouring of pensioners over younger generations in both the state pension and the welfare systems.

Analysts have branded the news ‘disturbing’, and issued a warning stating that the new pensions system would only contribute to a financial crisis for younger savers.

A spokesperson for the DWP stated: ‘In the first 15 years of the new state pension, around 75% of people will be better off than under the old system. The new state pension will provide a sustainable system for future generations who will also benefit from workplace pension savings throughout their careers’.