Pensions  

DWP won't contact state pension losers

DWP won't contact state pension losers

State pension changes have not been communicated by the Department for Work & Pensions' to those who will lose out the most, a report into the introduction of the new state pension has claimed.  

According to the National Audit Office's 54-page report, called Department for Work & Pensions: Introduction of the new state pension, the DWP's attempts to "improve people’s understanding of their state pension have had limited success so far".

The report from the NAO stated it was not yet clear whether the simplification of the state pension will support wider pension reforms, and warned although the rule changes "mean some people will gain while others lose out", the losers have not received appropriate communication from the DWP.

The DWP had agreed earlier this year to write to more than 100,000 people within nine years of state pension age and whose national insurance record suggested they would not meet the 10 years' minimum qualifying period for the new state pension.

However, the NAO said the DWP had "rejected" the Work & Pensions select committee's recommendation to write to two further groups "adversely affected" by the new state pension.

According to the report: "These were people, largely women, who are no longer able to derive pensions based on their spouse's national insurance record; and people reaching state pension age from 6 April 2016, who are eligible for guaranteed minimum pensions, which the government will not longer uprate through the state pension to take account of inflation."

The NAO report stated the DWP's reason for not writing to these groups was that it could "not accurately identify" who was affected.

Instead, it pledged to focus on a communication campaign to get people to consult with the gov.uk website.

Yet the NAO report has highlighted that one of the Department’s objectives of state pension reforms was to prompt people to take action and plan for their retirement from a younger age.

It stated there was "not yet any evidence that the new state pension has encouraged people to save more for their retirement", with 60 per cent of people still thinking that if they retired after April 2016, having worked for 35 years or more, they will always get the full amount of state pension.

Instead, they will actually get a payout based on their national insurance record, taking into account any contracted-out periods.

The report stated: "The DWP has not yet tackled all the barriers that discourage people from saving for their retirement, although other pension reforms help."

As a result, the DWP stated it plans to spend £7m on state pension communications between 2016 and 2020.

According to the report: "The DWP recognises the need to adapt its communications campaign to achieve the project's long-term objectives. 

"The DWP aims to raise awareness of the importance of checking state pension entitlement among a wider audience."