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- New state pension supposed to be flat rate of around £151.25 a week
- Thousands received statements confirming pension payment reductions
- Government frantically trying to find clearer way to explain new system
- Leading actuaries admit even they are confused by the figures
- Savers urged to contract out of second pensions in 1980s now penalised
The government's flagship plan for a new flat-rate state pension is in chaos as millions of workers are discovering they have been misled by the promise of a better retirement. From April 6, the current basic state pension of £115.95 a week will be replaced by a new payout that ministers pledged would leave many better off and put an end to the complicated system of credits and top-ups. The new state pension was supposed to be a simple flat rate of around £151.25 a week. But with just 204 days to go, tens of thousands of workers approaching state pension age have received statements showing they will have huge amounts docked from their weekly payment because at some point in their careers they contracted out of the state second pension, also known as Serps. In some cases, the deductions mean they will receive just a few pence more than the current basic state pension. Worse, when they seek an explanation from the Department for Work and Pensions (DWP), they are left baffled. And the sums used to calculate the deductions are so confusing, they cannot even challenge them. Incredibly, leading actuaries admit that even they are confused by some of the forecasts savers are given. Many complain the new system is unfair and that friends and family who have worked for fewer years and paid thousands of pounds less in National Insurance will now earn a larger state pension. And, crucially, they feel cheated because the Government never fully explained how the new state pension would work.........Read more here