State pensioners are being short-changed on their Department for Work and Pensions (DWP) state pensions—to the tune of £185,000. Thanks to an April rise from the DWP, the state pension has risen to £12,547 a year for new pensioners. But some retirees are being handed £185,000 more than their peers due to the postcode lottery of life expectancy.
Regional Disparities in Pension Payments
People living in Fleet, for instance, are expected to live to age 85. This would mean £306,800 worth of DWP payments by the time they die. However, in Blackpool, this amount is reduced to £121,900—or £184,900 less—because life expectancy is nine years shorter.
Former Pensions Minister Speaks Out
Paul Maynard, former pensions minister, said: "I've always been conscious that my former constituents were paying a significant amount in, but may well be getting out far less than others. Policymakers need to appreciate the fact that not everybody lives in the South East and people require access to money at different points in their lives—and that doesn't necessarily align with the life experience of many policymakers."
Expert Analysis on Inequality
Tom Selby, of AJ Bell, commented: "There are few clearer examples of the impact of inequality than average life expectancy. These figures emphasise that through the accident of birth or favourable circumstances, some will, on average, enjoy far more state pension income than others. Of course, the highest taxpayers also generally pay more into the system through their lifetimes, but the disparity is nonetheless stark."
Selby added: "There are ways you could, in theory, try to address this, but each comes with fiendish complexity, administrative costs and the risk of unintended consequences."
Government Response
A Department for Work and Pensions spokesman said: "Supporting pensioners is a priority and our commitment to the triple lock means millions of pensioners will see their yearly state pension rise by up to £2,100 this Parliament. The state pension is set at a national level to ensure it is a universal entitlement to all UK pensioners regardless of where they live."
