Majority worse off under new state pension by 2050

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Around 70 per cent of people will be worse off under the new state pension than they would have been under the old system by 2050, DWP figures reveal.

An impact assessment published today, which takes into account the final level of £155.65 a week for the first time, details the winners and losers from the reform.

While the Department for Work and Pensions says over 75 per cent of woman and 70 per cent of men will be better off, by 2050 seven in ten will be an average of £14 a week worse off.

Hargreaves Lansdown head of retirement policy Tom McPhail says: “The further into the future we go, the more losers there are. The message to those in their 20s today is that you can still look forward to a state pension but it’ll be less generous than that enjoyed by today’s pensioners.”

Hymans Robertson partner Chris Noon adds: “Far greater numbers across the whole workforce stand to lose out. While the DWP cedes this in its paper, the messaging to the public continues to focus on the winners.

 “While it’s great that these people are better off, surely it’s more important to tell those who are set to lose out that they will so that they can make up the shortfall – and have time to do so. Two thirds of people in private sector DC arrangements do not save enough. Generally speaking it’s private sector workers who will be worse off under the new regime.”