The potential impact of state pension changes have been so poorly communicated than many have no idea whether they will be better or worse off, according to an influential group of MPs.

With just weeks to go before the introduction of the New State Pension, the Work and Pensions Committee has called on the government to write to those people who stand to lose out in the early years of retirement.



The Committee has also urged the government to provide a new state pension telephone hotline service, which would provide crucial advice on how people can increase their state pension entitlement.

Relying on individuals requesting a state pension statement or generating one on a website risks missing those most in need, the Committee says.

MPs warn that only 13 percent of those who reach retirement in the first year of the New State Pension will receive the flat rate of £155.65 a week.

More than half (55 percent) will receive less than the flat rate in the first year on the New State Pension, while only 32 percent stand to gain.

People who stand to lose out – mainly women – include those with fewer than 10 qualifying years of National Insurance contributions, and also those who may have otherwise benefited from a spouse’s contributions under the existing system.

Frank Field MP, Chair of the Committee, said: “The New State Pension will ultimately be a welcome simplification of an over complicated system. The problem is that failures of communication mean that too few people understand it.

“The Government seems to have manged to muddle its communications to the point where neither the winners nor losers yet know who they are.

“There is no way that communicating changes which affect different groups very differently, over different timelines, should ever have been left to general awareness campaigns or happenchance.



“The oversimplified message about the flat-rate amount has left many people unprepared and confused.

“We very much welcome the commitment in the Budget to a one stop “pensions dashboard”, which we and others have been calling for. It is only one part of the answer though.

“Government must focus on identifying the individuals affected, assessing their potential losses, and communicating with them directly, clearly, and regularly.

“But nobody should underestimate the challenges of achieving this objective.”

Owen Smith MP, Labour’s Shadow Secretary of State for Work and Pensions, said: “The cross party committee has echoed Labour’s concerns that this Tory Government is failing to be straight with people about their pensions. Communication has‎ been woefully lacking, especially with people who stand to lose out as a result of government changes.

“More should be done to warn those who are set to lose out following the roll out of the new state pension, especially as a majority of people now under 43 will be worse off, by up to £20,500.

“I welcome the report’s calls for the Tories to wake up to the scale of their mishandling of speeding up the state pensions age rise for women born in the 1950s.

“The women affected have worked hard all of their lives and the least they deserve is for the Government to look seriously at options to help them, starting with the early access to pensions option that is gathering such momentum.”




This article contains Parliamentary information licensed under the Open Parliament Licence v3.0.