Dr Ros Altmann, director-general of Saga

by David Jones

Stop penalising women pensioners and make it safe to save.

That’s the message to the government from Dr Ros Altmann, director-general of Saga, the Folkestone-based holidays and finance company.

She was commenting on new figures from the Department of Work and Pensions which show huge variations in the amount of state pension being paid to individuals.

Pensions minister Steve Webb described the current pension as so complex “it would baffle even Einstein.”

About 130,000 pensioners are receiving £7 a week or less, while around the same number are receiving £230 or more.

Dr Altmann said the figures re-enforced the need for State pension reform.

“The UK state pension system is the by far the most complex in the world.

"Almost no one understands it and it is not fit for purpose. It fails to provide an adequate pension income for millions of Britain’s pensioners, particular women and low earners.

"Radical reform long overdue - at the moment the UK State pension system relies far too much on mass means-testing which particularly penalises those who have tried to save for their retirement.

"As we are about to automatically enrol all workers into a private pension scheme, it is vital that the state pension system makes it safe to save. “

Although the figures highlighted the dramatic differences in pension payments, the reality, said Dr. Altmann, was predominantly men that got the highest amounts and women the lowest.

“We welcome the prospect of a adequate state pension that would lift most people above means-testing.

"The new pension system should be fairer and simpler and no longer treat women as second class citizens but we still need to see the details of the new framework and how the Government plans to implement it in order to ensure fairness.”

• The current state pension is made up of the basic state pension and various additional state pension entitlements, but it is set to be replaced by a flat-rate state pension for new pensioners set above the level of the means test, currently estimated at around £140 per week. A white paper is set to be published later this year with further details.