We need to know at a glance how much pension has been built up to date, how much is likely to be achieved by contributions to normal retirement age and how many more years’ contributions would be needed after April 2016 to achieve the full pension if this is likely to be earlier than retirement age.
The second section could carry details of the two calculations used to arrive at the starting pension, including the deductions for contracting out.
The current statement gives people no hope of understanding how the answer has been reached, whether the calculations are actually correct and whether they will reach the full flat-rate pension.
Sorry DWP, but you must go back to the drawing board.
You say deduction, I say adjustment
It is now well-documented that most people will not get the full flat-rate pension initially. That is because money is being deducted to take account of years contracted out.
My starting pension would be just £103.86 a week under the new system – which is £12 less than the basic state pension – even though I have a 37-year NI contribution record.
Now I am hearing that there is such a kerfuffle in the DWP about these ‘deductions’ that some senior officials are suggesting the word is banned.
Apparently, they are arguing that this is not a deduction, but an “adjustment”.
It is almost as if they are picking up lessons from the insurance industry.
The last time I remember a deduction being described as an adjustment was in connection to with profits policies devaluations.
Every time we used the term ‘market-value reduction’, certain insurers would phone and insist it was an adjustment not a reduction.
One might almost think that former ABI policymakers are now active and having an influence in the DWP – surely that cannot be the case can it?
Investors are calm, cool and collected
Hargreaves Lansdown reported that its Investor Confidence index rose to its highest level this year after the August stock market falls.
Having said that, confidence in Asia and emerging markets plummeted.
So presumably they can see particular value in markets closer to home.
The score belies the idea that investors plunge in when the market is high and run for cover after falls, and suggests a more sophisticated approach is now more likely.
Tony Hazell writes for the Daily Mail’s Money Mail section