Personal PensionNov 25 2015

Webb denies new state pension was mis-sold

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Webb denies new state pension was mis-sold

The new state pension was not “mis-sold”, according to the former pensions minister Steve Webb.

Giving evidence to the Work and Pensions Committee this morning he said that communications around the new flat rate had been deliberately simplified because providing technical detail on things like contracting out would have stopped the overarching message of the reforms getting out.

Earlier this week, the current pensions minister Ros Altmann told a conference that the government’s late and lacking promotion of the new state pension - due to come in next April - has been one of her priorities, but admitted that so far the reforms had been “misrepresented”.

She also told BBC Radio 4 Woman’s Hour that the changes had been mis-sold, something which Mr Webb denied today.

“I do think it was incredibly difficult to communicate any measure of detail beyond the headline,” said Mr Webb. “The big thing is that we are moving to a flat rate, for people in their 20s, 30s and 40s they are more likely to get a flat rate.

“If we hadn’t simplified the message we wouldn’t have got any message out at all, perhaps we over simplified but I don’t think it was in a dishonest way.”

Mr Webb said he was pleased that the Department for Work and Pensions had sent out 500,000 personalised letters to people approaching pensions age to clarify their entitlements under the new pension.

He suggested that the committee ask the government to provide a table of winners and losers from the removal of contracting out under the new flat rate pension, adding that those that had contracted out would gain under the new rules.

At the end of last month, the shadow pensions minister Nick Thomas Symonds took advantage of Ms Altmann’s attack on actuaries Hymans Robertson for highlighting potential losers from the reforms.

His party colleague and chairman of the Work and Pensions Committee Frank Field launched an official inquiry into the state pension changes, after concerns were raised that many of those who will be affected do not know enough about the changes or exactly what they will mean for their pensions.