Concerns

The TUC says that although the introduction of a single-tier state pension is not a bad thing in itself, the government is not introducing it in a way that protects current workers sufficiently. It predicts that many private sector workers will be worse off. The National Pensioners’ Convention reported that at least five million existing pensioners, mainly women, have been left out.

The Institute for Fiscal Studies (IFS) has calculated that of those hitting State Pension Age between April 2016 and April 2020, 35% of men and 61% of women would see their pension income increase, while 21% of men and 14% of women would get a lower income.

However, as things stand, pension gains would be offset by reductions in means-tested benefits. So while 64% of the lowest-paid fifth would receive higher pensions income, only 40% would find that their household net income went up. In the longer-run, the IFS said that the new system would be “less generous to just about everyone than the system it is replacing”.