Huge differences in the "pensions roulette" system, which could add up to £10,000 a year, are occurring because the level of basic and additional state pension payouts can widely vary under the "complex" system of regulations, the Department for Work and Pensions (DWP) said.
According to DWP figures, state pension income varies from about £7 a week to £230 a week. Around 130,000 people receive £7 or less a week and a similar number get £230 or more a week.
The Government plans to replace the current state pension system with a simple flat-rate state pension for new pensioners set above the level of the means test, estimated at about £140 a week.
Further details of how the Government plans to simplify the system will be set out in a White Paper later this year.
A landmark scheme to automatically enrol up to 10 million people into workplace pensions will begin this October, starting with larger companies, as part of plans to tackle the pension savings crisis amid concerns that people are not putting away enough for their later years.
"Worse, if people have no idea what they will get, they can't make sure they have enough savings for their retirement. We can't go on playing roulette with pensions. A flat-rate single-tier state pension will restore simplicity and give people certainty instead of chance."
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Ros Altmann, director-general of over-50s group Saga, said the state pension system should stop "penalising" women.
She said: "The reality is that it is predominantly men that get the highest amounts and women the lowest. We welcome the prospect of an adequate state pension that would lift most people above means-testing."