21 March 2003
MPs this week described as 'appalling' the government's delay in informing 6 million people who are expected to retire between 2002 and 2010 of possible cuts to their inherited state pensions.
The Commons' Public Accounts Committee said the Department for Work and Pensions' tardiness in informing workers close to the age of retirement about changes to the complex State Earnings Related Pension Scheme (Serps) gave many 'little time to make new pension arrangements'.
The PAC's blast followed the March 20 publication of a National Audit Office follow-up report on Serps.
After the original NAO report, the PAC claimed that 'many people had been seriously misled' by the then Department of Social Security over the proportion of an individual's Serps pension that could be inherited by a spouse, and both watchdogs recommended 'suitable redress'.
The government responded in 2002 with new regulations clarifying entitlements for 20 million people – a reaction praised by the NAO in its latest study. But auditors said more should have been done to inform those closest to retirement. Some received letters up to a year late.
PAC chair Edward Leigh said: 'Those were the people most affected… and it is unacceptable that the department should have put them into this position.'
The NAO also condemned the DWP for having to write repeatedly to more than 500,000 people who requested Serps valuations, because the department's original correspondence had been unclear.
Leigh added: 'The public has every right to receive timely and accurate information about changes to their pension entitlements. Evidence that the department is improving should not blind us to the fact that in some areas it is still failing in its duty.'
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