Young lose out on state pension

The government has published figures showing that most people retiring over the next 15 years will be gainers from the new flat rate state pension which is being launched in April.

But the calculations also demonstrate how millions of young people could lose out significantly from the reform.

The Department for Work and Pensions says that 73 per cent of those reaching pension age between April and the year 2030 will be better off than if the existing system had carried on, typically by £10 a week.

By 2040, though, most new retirees will be receiving around £11 less.

The new State Pension will pay a higher rate, £155.65 a week rather than the current £119.30,

Although under transitional arrangements very few people will qualify for the exact new amount in the early years - some will be paid more and some less.

The increase is paid for by throwing in all the extra payments available at the moment, such as means-tested Pension Credit and the earnings-related State Second Pension.

By the time people just starting out in the world of work, in their twenties, come to retire, virtually all will qualify for the full flat rate payment.

But what is most interesting about these figures is that this younger group will do much worse than if the current rules were left alone.

69% of those retiring in 2050, now in their thirties, will lose out compared to staying in the current system, typically by £14 a week.

And 76% of those in the 20s will get less, typically £15 less.

In most cases this is because they would never have had the opportunity to contribute to the State Second Pension, the most generous current top-up.

400,000 women to miss pension uplift

The government has admitted that hundreds of thousands of women currently aged 59 or 60 are at risk of receiving lower weekly pensions than men of the same age.

They make up a group of 430,000 destined to reach the lower female pension age before a new, flat rate pension of £144 a week comes into force.

Typically, they will get £127 a week while men of the same age will qualify for the flat rate.

That's because the men won't reach their higher pension age of 65 until after the flat rate payment is introduced in April 2017.

The difference will be eliminated from that date - and from late 2018 women will retire at the same age as men in any case.

The Pensions Minister, Steve Webb, argued in parliament today that the women would be better off over their lifetimes.

"Many of this group of women will be thousands of pounds better off by being able to draw their pension years before a man of the same age," he said.

"And they would not thank us if we made them wait years longer for their pension."

The Department for Work and Pensions released figures showing that up to 85 per cent of  the women will receive a higher income over their retirement under the current system than a man born on the same day.

The Department also stated that 75 per cent of them could defer claiming the state pension and qualify for a weekly rate of £144.

However, many women are likely to find that their weekly pension income remains lower than that of a similarly aged man, simply because of the timing of the planned reforms.