Millions of retirees due up to £25k in pension benefits

More than a million pensioners are in line to receive up to £25,000 in back payments thanks to a government-led scheme to redress decades of retirement unfairness.

In an effort to close the gap between men’s and women’s pensions, businesses were told in 2018 to adjust the final salary pensions of current and former staff to equalise payments.

However, the vast majority of employers have yet to pay out. Up to 1.5 million retirees could start to receive payments in the next six months to a year, according to Vicky Mullins of XPS Pensions, a consultancy. The average payout will be £1,000 but those who suffered the biggest discrimination could be in for a windfall of £25,000, according to figures compiled by XPS and shared with Telegraph Money. Around 50,000 people are due more than £10,000.

Ms Mullins said her “biggest concern” was that those who were likely to gain the most from the redress would never see the payments if employers did not act quickly. The average age of those who are owed the largest sums is 80. “It is incredibly important that members receive the money they are entitled to, particularly at this difficult economic time when older pensioners may have significant need for income,” she said. The equalisation will affect almost every defined benefit pension scheme in Britain and should result in altered payments for those who were members of “contracted out” schemes between 1990 and 1997. They are estimated to number five million when those who have yet to retire are taken into account.

The number of retirees who could receive up to £25,000 in missed pension benefits