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  • January 2015
01

New state pension 'widely misunderstood', say MPs

Open-access content Monday 11th January 2016 — updated 5.50pm, Wednesday 29th April 2020

Confusion on when and what people will receive from their new state pension is “rife”, according to report published by the Work and Pensions Select Committee.

2


The committee said it was "extremely concerned" at evidence that pension statements and forecasts are "confusing" and in some cases "contradictory", and do not provide people with essential information. 

The report follows an inquiry about the Department for Work and Pension’s communication methods, and the impacts on women who were not aware of the increase in state pension age as they approach retirement. 

Some women who had expected to receive their pension at 60 had only been told "a couple of years" before their expected date to claim their state incomes that these would not be available until they reach 66, according the committee. 

Frank Field, chair of the committee, said successive governments had "bungled" the changes to when women could expect their state pension.

He said: "We are also concerned about the accuracy of existing information that is being sent out to women about their state pensions entitlement. Groups representing this grotesquely disadvantaged group of women have suggested a pension entitlement notice. And so have other experts who have given evidence to the committee."

The inquiry is ongoing but the committee was "so concerned about misinterpretation attributable to confusing statements" that it has published today's interim report to reflect this urgency.

Field said: "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 has not decided on a date to publish the full report but it intends to take more evidence and examine the inquiry more closely. 

Chris Noon, partner at Hymans Robertson, agreed that the new state pension was widely misunderstood and called for broader communications to be looked at in the full report.

"While we welcome the sense of urgency it creates in dealing with the issues for those approaching retirement, we also hope that the full report looks at how the new state pension is being communicated to the whole workforce, not just those approaching retirement. This is because the majority will receive less state pension in the new regime than they would have done in the old," he said.

Last week, the government was also urged to "immediately" implement transitional measures for women who are affected by the change, after losing out on a vote in a House of Commons backbench debate.

This article appeared in our January 2015 issue of The Actuary.
Click here to view this issue
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