MPs attack Govt over ‘confused’ state pension comms


MPs have called for urgent reform of state pension statements after an inquiry found that confusion was “rife” about how the new state pension affected those reaching retirement age.

The Work and Pensions committee has published a report today which says it is clear that the new state pension, which replaces the basic and additional state pension from 6 April, is widely misunderstood.

MPs say they are “extremely concerned” that state pension statements and forecasts are confusing, and in some cases contradictory.

The report suggests a series of changes to state pension statements, including:

  • statements should be limited to one page in length;
  • key messages should be highlighted in boxes to ensure they stand out clearly;
  • statements should prioritise the current value of state pension built up, state pension age, the date that age will be reached, and how to build up additional benefits;
  • state pension age should be highlighted in a prominent position, especially for those whose pension age has changed;
  • means of getting further information, such as a full breakdown of NI history, details and calculations of NSP starting amounts, and calculations of deductions for period of contracting out should be clear and that information should be readily available;
  • the term ‘Contracted Out Pension Equivalent’ should be replaced by ‘contracting out deduction’; and
  • the contracting out deduction should be explained as such, making it clear that it is a reduced state pensions as a consequence of paying reduced NI contributions but may be compensated for by the individual’s private pension scheme.

Work and Pensions committee chair Frank Field says: “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.”

He adds: “We expect the Department for Work and Pensions to hammer out a new pension entitlement notice, and begin supplying all women with accurate information on their pension entitlement.”