Major state pension update as one group set for largest payouts from next yea…

For the first time in history, women are set to receive a bigger state pension than men, after traditionally receiving less under the old state pension system, when men were often the main earners in their households.

In 2016, the new state pension was introduced to help address the inequality between both genders.

Now, 10 years after the system was brought in, experts believe it is finally set to close the long-standing gap between men and women from 2027.

Sir Steve Webb, former pensions minister and partner at pension consultancy LCP, told the Mail on Sunday he “firmly” expects women to overtake men for the first time “in the coming months”.

Sir Steve, who helped design the new system, added: “For generations, women have been the poor relations when it came to the state pension system.”

“A key aim of the new state pension was to remove this discrimination and treat men and women equally.”

Women who started receiving the full new state pension for the first time this year earn 36p less than men per week – just under £19 a year – on average, according to Department of Work and Pensions (DWP) figures

But those who reached state pension age five years ago get £322 more each year than their female counterparts.

Meanwhile, analysis last year revealed that women nearing retirement can expect to get £5,000 less in private pension income than men.

The new state pension is currently £241 a week or £12,547 a year, and anyone who reached state pension age – currently 66 – and has at least 35 years of national insurance contributions can receive it.

From April 2027, it’s set to rise by £489 to £13,036 a year under the triple lock.

This is the same for both men and women.

But the reason women are set to overtake men in earnings is because of how this new 2016 pension phased out legacy rules that heavily favoured men.

Under the old state pension, payouts were split into the basic state pension (£184 per week) plus something known as “Serps” (state earnings-related pension scheem).

This was an entitlement to extra earnings, and most people received it on top of their basic state payment.

You earned Serps depending on how much you worked, so it was typically more valuable to men as they worked as earned more than women.

When the new state pension came in, anyone who had already accumulated Serps was given “transitional protections”, meaning they could lock in their old pension if it was higher than the new flat rate.

Because men were far more likely to have built up large SERPS top-ups before 2016, a much higher percentage of men received these extra protected payments than women, meaning they earned a higher pension on average.