PENSIONSANDSAVINGS.COM

11 September 2016

• Government must make sure people know that by 2020 you won’t get your State Pension at 65
• DWP should learn lessons from the failure to adequately inform women about past changes
• In four years’ time the State Pension Age will be 66 – DWP must publicise this properly

By October 2020 the state pension age will be 66, so nobody reaching age 65 will get a state pension.  I am concerned that millions of men and women in their early 60s still don’t know this.

State pensions are the bedrock of retirement security for many people, so the Government must take proper care when managing a policy that will affect so many people so profoundly.

DWP should take more care to ensure people know about State Pension Age rises:  Having witnessed the problems caused by its failure to ensure women knew about the forthcoming rise in their state pension age, it is important that proper care is taken to alert people to the fact that 65-year olds will no longer be eligible for State Pensions from 2020. People need to know.

A major national advertising campaign could help:  Advertising in newspapers, radio and even television can help to ensure as many people as possible know they won’t get their State Pension at age 65 and allow them to plan accordingly.  The DWP has spent huge sums advertising the new State Pension and for State Pension Top-Up, but not for State Pension Age changes – even though such a publicity campaign is far more important than using public money to promote State Pension top-up, which is unsuitable for many people and will only help tiny numbers of pensioners, most of whom are well-off.

DWP should learn from problems it caused older women:  The DWP does not seem to have learned enough from the problems it caused for older women who have seen huge increases in their State Pension Age.  The WASPI campaign highlighted the anger and hardship felt by many women who were unaware their State Pension Age would no longer be 60.

WASPI campaign resulted from inadequate publicity of past pension age rises:  Despite having 15 years to inform women of the significant changes introduced by the 1995 Pensions Act, which legislated that women’s state pension age would increase by up to 5 years after 2010, the DWP failed to ensure that they knew.

Both men and women’s State Pension ages will be rising in next couple of years:  Then, in 2011, the Government decided to impose a second increase in these women’s State Pension age, this time with only five years’ notice, while men’s State Pension age would also start rising within seven years.

Digital Statements and letters are not enough:  It is true that anyone who uses the new digital State Pension forecasts will see their State Pension Age, and letters have been written to those affected, but this is not enough.  Many people are not on-line or do not yet know about the digital statements.  Many will not have received the letters that were sent to them.  It is crucial to ensure everyone knows what is happening to their State Pension age and a national advertising campaign is urgently needed to tell people.

ENDS

 Notes:

1. Anyone who wants to check their State Pension Age can use the calculator below https://www.gov.uk/state-pension-age
   
2. State Pension top up is also called ‘Class 3A National Insurance’ contributions – it is not suitable for everyone.  People who reached state pension age before April 2016 are being offered the chance to buy extra State Pension.  It is vital that people check whether this scheme is suitable for them before giving their money to the Government.  The cost can be many thousands of pounds, so they should not really buy extra pension without getting advice to know if this is the right thing for them.  Someone who is aged 68, can buy an extra £25 a week State Pension for life (that is the maximum available) but would have to pay £20,675 to the Government for this.  Even buying an extra £10 a week State Pension would cost a 65 year old £8,900.  Most pensioners will not have that kind of spare money lying around that they would want to use for a bit of extra State Pension.  If they are not in good health, have no partner, die soon after investing, or have gaps in their National Insurance record, this State Pension top-up may not be a good deal for them.  However, if they were thinking of buying an inflation-linked annuity with this spare money, then the State Pension top-up could offer much better value.