State pension gender gap narrows following 2016 changes

The state pension gender imbalance has been reduced from almost £28 per week to around £7 since the introduction of the new state pension, according to LCP analysis of Department for Work and Pensions figures.

The research highlighted that under the pre-2016 state pension system the average man would receive £163.76 per week and the average woman would receive £136.07, compared to £160.09 and £152.90 for men and women respectively under the new system.

Analysing the figures, LCP pointed out that the features of the new state pension designed to spur this equalisation were basing the system around a ‘flat rate’, rather than an earnings-related element that favoured those who earned more, and the new system treated periods working as a carer more generously.

The pensions consultancy added that, as the new state pension system had been introduced with no net overall cost, higher average pensions for women have in part been financed by lower average pensions for men.

LCP partner, Steve Webb, said: “Whilst any gender difference in pensions is unwelcome, it is very good to see that the 2016 reforms to the state pension are starting to make a real difference to women’s pensions.

“The fall in the state pension gender gap from around £28 per week to around £7 per week is very striking, and reflects the way the new system was designed.

"A year caring for a young child or an elderly relative now generates just as much state pension as a year running a FTSE 100 company, and this change has contributed significantly to reducing the gender pension gap”.

The new state pension was introduced four years ago, though analysis released by Just Group in May found that more than half (56 per cent) of people who reached state pension age since April 2016 do not receive the full amount of the new state pension.

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