Industry disagrees with Altmann over mis-selling

Search supported by
Industry disagrees with Altmann over mis-selling

Industry commentators have disagreed with comments by the pensions minister Baroness (Ros) Altmann, who said the flat rate state pension had been ‘mis-sold’ and the financial services industry is partly to blame for the low take up of Pension Wise.

In an interview about women and pensions for BBC 4’s Woman’s Hour on 11 November, interviewer Jane Garvey asked Baroness Altmann about qualifications for the flat-rate state pension that is to come into being next April.

Baroness Altmann agreed that some people, especially women, could end up only part qualifying for the £150 a week maxiumum, and that some might even be getting as little as £129 a week.

She said: “There have been so many misconceptions about this. I agree with you [that this is being mis-sold] and I am doing things to try to correct that.”

When asked for clarification, the Department for Work and Pensions’ press office referred to previous statements from the pensions minister on the flat rate state pension, in which Baroness Altmann has spoken of the unfairness of this new flat rate on women in particular.

Matthew Phillips, managing director at Thomas Miller Investment, denied that advisers and providers were to blame for the low take-up of Pension Wise.

Mr Phillips said: “I have an immense amount of time for Baroness Altmann, but blaming pension providers for the low take up of Pension Wise is missing the point, and seems to be wilfully blind to what many in the profession had highlighted before.

“To put it bluntly, Pensions Wise was rushed through, not thought out and not well planned. We have said that before and no one should be surprised at the poor take up. To be clear, we want Pension Wise to work. A better-informed population is better for all of us.”

Malcolm McLean, OBE, senior consultant at benefits consultant Barnett Waddingham, said: “I find it surprising that she made that remark. It is quite a damning statement. It brings into question the issue of maladministration. This could result in a complaint to the Parliamentary Ombudsman, who could make the government pay compensation if it upholds the complaint.

“What I think the pensions minister meant to say is that the issue had not been communicated well, which is different from agreeing with an allegation of mis-selling. It was an unfortunate slip of the tongue that was made on a radio programme.”

On 27 October, the Parliamentary Committee on Work and Pensions, chaired by Labour MP Frank Field, launched an inquiry into the new state pension following concerns that many of those affected by the changes do not know exactly what the change will mean for their pensions.

Adviser view

Jason Witcombe, director at London-based IFA Evolve Financial Planning, said: “Most of what the government does is mis-selling to us. There is the party line and there is the truth. However, whether mis-selling is the correct expression is dubious. I think that ‘poorly communicate’ is more accurate. I hardly think that you will get ambulance-chasers suing the government.”