Half of men over 50 will get less with new pension

AROUND half of men now in their 50s will receive a lower retirement income from the new state pension than under the current system, official figures reveal.

The news is a devastating blow to a generation of workers led by politicians to believe they would be better off under the revised rules.

According to a study by the Department for Work & Pensions (DWP), more than half of those now in their early 50s stand to be up to £11 a week worse off in the system which starts in April.

A quarter of those in their 60s and due to retire between next year and 2020 will be typically £2 a week down. The figures reveal the winners and losers from sweeping changes to the pension. From April the current £ 115.95 a week payout will be replaced by one of £155.65 a week – the deal is expected to be fairer for groups such as women and the self-employed.

But top-ups known as the State Second Pension (SSP) which workers can earn to increase their state pension by up to £ 164 a week will be scrapped.

The study forecasts that men currently in their early 50s will be hardest hit by the change.

From April they will no longer accrue SSP – had they been able to keep adding the extra payments, their total state pension would have been more than the incoming amount of £155.65.

The figures show that just more than half of men aged 5155 today and expected to hit state pension age between 2026 and 2030, will be on average £11 a week worse off, with current 51-year- olds the worst affected. Almost six in ten of this group face being worse or no better off after the change.

Many of those currently in their 60s who will claim their pension in the first four years of the new payout will also lose: just less than half of men retiring from next year to 2020 will be on average £3 down, or no better off.

From 2021 to 2025 the proportion of men who will lose out is forecast to climb, with their typical loss rising to £7 a week.

By contrast, women who have been penalised under the current system for taking time out of work to raise children do better in the shake-up. Six in ten retiring in the first four years of the payout will see incomes boosted by £8 a week, with the rest receiving the same pension, or being no more than £2 worse off.

Around two-thirds of women retiring from 2026 will find their pension is improved by £10 a week. Malcolm McLean, senior consultant at actuarial firm Barnett Waddingham, said: ‘The new pension was trumpeted by politicians as being more generous without anyone ever properly explaining it.

‘We have always known there will be winners and losers; at least the Department for Work & Pensions is now coming clean about who they are.’ Adrian Walker, retirement planning manager at insurer Old Mutual Wealth, said: ‘ These figures should be a wake-up call to the public that as far as possible they should not rely on the state pension as their only provision.

‘They are likely to worry those age 55 and under the most.’

A DWP spokesman said: ‘Around three- quarters of those who reach state pension age in the next fifteen years will have a higher state pension than they would have done.

‘The new state pension will be easier to understand than under present rules – and will provide a robust system which will be sustainable for future generations.’

‘A wake-up call to the public’