MPs probe failure to explain State Pension reforms
The Government has failed to clearly inform people about state pension reforms and appears to have “moved the goalposts”, a scrutiny committee has suggested, as it launched a probe into the new system this morning.
The Work and Pensions Committee has set up an inquiry into the changes which are to be introduced in April 2016, raising questions over how effectively these have been communicated to the general public.
The launch of the investigation follows recent comments from new Pensions Minister Baroness Altmann who said in September that the Government had failed to clearly explain the changes.
Frank Field MP, chair of the committee, said: "There is a sense that Government has somewhat moved the goalposts in retirement savings without providing enough information about what are, in the end, complex changes, and a risk that some people may face a shock when they come to claim their pension. It is important that groups most affected by the changes receive targeted communications that highlight the options available to them."
Minister for Pensions, Baroness Altmann, last month launched a new advertising campaign to help explain the changes more clearly. The probe will examine whether this campaign to “adequately prepares individuals for the changes”.
The committee report stated: “Concerns have been raised that many of those who will be affected by the changes do not know enough about the changes or exactly what they will mean for their pensions. While many people are expected to be better off, people with for example less than 10 years of National Insurance contributions will no longer receive any State Pension, and people will no longer be able to count on a percentage of their spouse’s pension after their death. People need a good understanding of what to expect from the New State Pension to aid retirement planning, and avoid confusion and shocks.”
Baroness Altmann told Financial Planner magazine in an exclusive interview this month that there was a “fiendishly complex legacy to deal with” on the State Pension, as she outlined it as one of her top three priorities.
She said last month that communicating the changes to the public had failed to be carried out effectively. She said: “Huge efforts have been put into reforming the mind-blowingly complicated State Pension system that exists today into something that, over time, will be clearer and fairer for everybody. But the job of explaining to people how the reforms will affect them hasn’t been done well enough.”
The committee has called for comments to its inquiry which can be submitted via the Parliament website.