"Urgent" steps needed to improve DWP pension statements, MPs say

11th January 2016 | Pensions (Company)

Immediate changes should be made to state pension statements issued by the Department for Work & Pensions to counter confusion in members of the public caused by lack of clarity, according to a committee of MPs.

The call comes in an "urgent" interim report issued by the House of Commons Work & Pensions Committee, which is currently inquiring into communication to the public of the changes to the state pension which will affect people reaching state pension age on or after 6 April 2016.

These changes, bringing in the new state pension (NSP), are coming into force at the same time as the pension age for women is being increased to match that for men, and the committee is so concerned about the information being sent out that it is raising the issue in advance of its main report. "We have also received alarming evidence about the lack of notice and information provided to women about their state pension age", the report states.

It continues: "We heard evidence of a widespread lack of awareness among individuals about what they will receive and when. We were concerned to be told that the statements intended to rectify this were confusing and lacked necessary information. Given statements are currently being issued as a rapid rate and the first pensioners will receive the NSP from April 2016, it is vital that these deficiencies are addressed as soon as possible. Our decision to issue this interim report reflects that urgency."

There remain "widespread concerns" that many women are still unaware of increases in their state pension age, some of them on the basis of official correspondence.

Among the changes that should "immediately" be made to state pension statements, the MPs recommend:

  • statements should be limited to one page in length;
  • key messages should be highlighted in boxes;
  • 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 prominently, 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 committee notes that in evidence the DWP said it was willing to adjust statements in response to customer feedback, and sets out an alternative form proposed by a campaign group which would reflect its recommendations.

Chairman Frank Field commented: "Successive governments have bungled the duty to tell women of these major changes.

"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."

Click here to view the report.