Confusion "rife" over New State Pension, say MPs

11 January 2016

The Work and Pensions Committee's report on the New State Pension calls on DWP (Department for Work and Pensions) to make urgent changes to the information they are sending to people reaching retirement age.

Report findings

The Committee says it has become clear over the last few months that the New State Pension (NSP) is widely misunderstood. The new system, which was introduced under the Pensions Act 2014, replaces the basic and additional pensions for people reaching state pension age from 6 April 2016. The evidence collected for this inquiry confirms that confusion over what people will receive from the NSP – and when they will receive it - is rife. The Committee is extremely concerned at evidence that State Pension statements and forecasts are confusing  - and in some cases contradictory – and do not provide people with essential information.

One witness to the inquiry recounted: 'I was not aware of the 1st increase although I was sent a letter in January 2005 from The Pension Service but it contained no increase in my State Pension Age. So in 2005 I still believed I was going to receive my State Pension at 60. I was then notified by The Pension Service in January 2012, 2 ½ years before my 60th birthday, that I would not be receiving my State Pension until I was nearly 66.'

This interim report sets out a series of changes to statements which the Committee believes DWP should urgently make. The Committee will be producing a further report addressing other issues, including the quality of other communications and the merits of transitional support to groups of women who have been subject to a change in state pension age.

Chair's comment

Frank Field DL MP, Chair of the Committee, said:

"Successive governments have bungled the fundamental duty to tell women of these major changes to when they can expect their state pension. Retirement expectations have been smashed as 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.

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. 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."

Further information

Image: iStockphoto

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