Government to write to the thousands who could miss new state pension requirements

 
Hayley Kirton
Follow Hayley
Celebrities Launch Post Office Appeal
Earlier this year, the Work and Pensions select committee urged government to review its pensions communications as a matter of urgency (Source: Getty)

Government has agreed to get in touch with those who are not on track to meet the qualifying requirements for the new state pension, the Work and Pensions committee revealed today.

Responding to a recommendation from the committee, government has agreed to write directly to those who look like they will not satisfy the minimum qualifying period for the new state pension, which is 10 years worth of National Insurance (NI) contributions, by the time they reach state pension age and would therefore not be entitled to as much as they have been under the old system.

In its response to the committee's recommendation, government pointed out that previous experience had shown that direct mail had little effect in raising awareness when aimed at a wide audience.

Read more: Eight annuity myths we're falling for

However, government's response added that it would identify those who were within nine years of state pension age who appeared unlikely to reach the full 10 year requirement and then gauge the effectiveness of a direct mail campaign targeted at this audience. It is thought there are over 100,000 people who fall within this category.

"The committee has encountered untold confusion among people who wanted to know the value of their state pension, and who had received little or no communication from the government," said Frank Field, chair of the committee. "It looks as though the government will begin to apply the lessons from our evidence, by writing to people who do not meet the minimum criteria for the new state pension.

"We very much welcome this initiative."

Read more: Eleven million people would top up their pensions if they knew about this

Earlier this year, the committee warned of the high levels of confusion surrounding the new state pension, going as far as to publish an interim report mid-way through its inquiry into the matter. That report called on the Department for Work and Pensions to reassess the way in which they presented people with information related to their state pension as a matter of urgency.

Welcoming today's announcement, Steven Cameron, pensions director at Aegon, said: "It is vital that this group understands this as early as possible rather than facing a shock at state pension age. Some may be able to take steps to improve their retirement prospects either through paying extra voluntary NI contributions or by contributing to a workplace or private pension."

Read more: Forget "retirement": Why we should really be aiming for salary independence

However, Cameron pointed out that more could still be done, adding: "Our research shows that millions of individuals have no clear understanding of how much or how little they may receive as a state pension. While people can now request a projection, the majority will not think of doing so.

"Sending out individual personalised state pension forecasts would mean individuals could look at these alongside their private pension forecasts, take stock of whether they are doing enough for the retirement they aspire to, and if not take early action."

The new state pension applies to those who reached pension age on 6 April or later.

Related articles