30th October 2015
Labour shadow pensions minister Nick Thomas Symonds MP has called on the government to come clean about who and how many people will lose out in next April’s state pension reforms which introduce a single-tier pension.
Thomas Symonds was prompted in part by a row which broke out between the pension minister Ros Altmann and an actuarial consultancy which published its view of the winners and losers. Altmann suggested the firm, Hymans Robertson had done so for publicity motives, but subsequently retracted those comments.
The call comes as the Labour chair of the Work and Pensions Committee Frank Field launched an inquiry into the changes following concerns that many people will be unaware that they are due to lose out.
Actuaries Hymans Robertson published an analysis which set out its calculations of the winners and losers. It suggested that less than half those reaching State Pensions Age shortly after 2016 will earn a full single tier pension of £155 per week.
Partner Sue Waites said: “Under the current regime, although basic state pension accrual is limited to 30 years, additional State Pension can be accrued over an entire working life (potentially up to 50 years), under the new system it will be capped at 35 years with no additional State Pension so there will be less scope to build up a more generous entitlement.”
Pensions minister Baroness Ros Altmann responded to this by saying: “This ‘research’ has been produced for the primary purpose of generating publicity for a private actuarial firm. It is misleading and represents irresponsible scaremongering.”
However, Altmann has since apologised for the accusations of scaremongering. Thomas Symonds has labelled the initial reaction “a serious mistake”, adding that Hymans raised “entirely valid concerns about the prospect of the government’s new single-tier pensions disadvantaging many low income workers”
Another Hymans Robertson partner Chris Noon said that while trying to simplify the State Pension was commendable, the changes have been rushed instead of being undertaken carefully in phases
“This has thrown up anomalies where different groups of people are being treated unfairly. While there will be around 10m winners – including women who take career breaks and self-employed workers – the fact remains over double that number will lose out.”
Altmann said: “The new State Pension has mostly winners in early years, then after the 2030s the system is less generous in order to be sustainable with an ageing population.”
She added: “The new State Pension will be straightforward in future, but we have to get through to 2016 first.” She added that the complexity is with the old system, not the new one.