The lift-off spacing distance between the eddy current sensor and test piece will influence the detected signals and accuracy of the measurement. Various techniques including novel sensor designs, features (lift-off point of intersection, lift-off invariance phenomenon), and algorithms have been proposed for the compensation of error caused by the lift-off effect using the eddy current sensor. However, few of these have directly measured the lift-off spacing distance, particularly for the distance up to 15 mm.In this paper, a lift-off tolerant pancake sensor has been designed. By analysing the sensitive region of the magnetic vector potential change (due to the test piece), the receiver of the sensor is designed as a circular spiral pancake coil with a large mean radius and span length (the difference between inner and outer radius). Experiments on the inductance measurement of three different non-magnetic samples have been carried out using both the designed pancake sensor and the previous triple-helix sensor. From the experiment result, the detected signal of the designed sensor has been proved much larger than that of the triple-helix sensor. Besides, simplified algorithms have been proposed for the measurement of the lift-off spacing and thickness of non-magnetic samples when using the proposed pancake sensor. Results show that the lift-off spacing and thickness can be measured with a small error of 0.14 mm (absolute error under 209.66 kHz), and 1.35 % (relative error, under low working frequencies of 142, 238, and 338 Hz) for the lift-off spacing from 1 to 15 mm.