MPs raise state pension reform concerns

11 Jan 16

There is widespread confusion over the impact of the government’s state pension reforms as information produced on the changes has been confusing and sometimes contradictory, a report by the work and pensions select committee has found.

The review said successive governments had “bungled” their “fundamental duty” to provide clarity on major changes, particularly for women approaching retirement age.

Frank Field, chair of the committee, said that some women have only been told a couple of years before the date they expected to retire that no such retirement pension is now available.

One witness to the committee’s inquiry recounted that long-held plans to retire at 60 were ruined when she was told just over two years before her 60th birthday that she would not receive state pension until she was 66 under changes.

“Groups representing this grotesquely disadvantaged group of women have suggested a pension entitlement notice,” Field said. “And so have other experts who have given evidence to the committee. We expect the Department for Work and Pensions immediately to call into the department these witnesses, hammer out a new pension entitlement notice, and begin supplying all women with accurate information on their pension entitlement.”

The committee said that confusion over when people will receive the new state pension, which replaces the basic and additional pensions for people reaching state pension age from April 2016, was “rife”.

The MPs said they are “extremely concerned” that pension statements, the primary means of communicating the impact of reforms to affected individuals, and forecasts are confusing and in some cases inaccurate or contradictory.

The committee’s inquiry is still ongoing, but due to their concerns MPs decided to release an urgent interim report to address the issues as soon as possible.

Recommendations made in the report include changes to format of statements, such as limiting statements to one page, and highlighting key information like retirement age.

A Department for Work and Pensions spokseperson said the DWP has sent out about half a million New State Pension statements since first launching them in 2014 and that these included "comprehensive information" explaining the rules of the new scheme and how the department works out an individual's pension estimates.

They said the DWP "are committed to ensuring the public fully understands changes being made to the state pension", and that is why it launched a multimedia campaign in 2014 that will continue over the coming months and years. It will also be launching a new digital service with Hm Revenue and Customs to help all working age customers better understand their state pension and how their national insurance record affects this. 

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