State Pension Mis-Sold

Ros Altmann believes changes to the state pension were “mis-sold” to the public and is working to minimise bad outcomes for a section of female retirees.

Speaking BBC Radio 4’s Woman’s Hour, Altmann said that under the new system, which comes in next April 2016, women would only be better off by £8 per week.

Presenter Jane Garvey asked Altmann how she would respond to female listeners who were born in March 1953, who found out for the first time when they were 58 that they wouldn’t get their full state pension until they were 63, leaving just two years notice – and a loss of nearly £20,000 income.

Altmann said: “I really feel for the women who’ve been affected by the state pension age increases, but all the changes that they’re facing were made in 1995, and when the 2011 pensions act was going through.

"I tried really hard to mitigate the changes in state pension age, which were designed to remove inequality.”

Later in the programme, financial journalist Paul Lewis said many women would be worse off under the new state pension.

He said: “If you look at the figures for the first year, only 20,000 women out of 90,000 will get the new state pension.

"And, 40,000 will get the same as before, and over 300,000 women will get less than they would have got under the same state pension.”

Altmann agreed that there had been a widespread misunderstanding of how many people would qualify for the full flat-rate pension.

When pushed by Garvey that this meant it was being mis-sold, Altmann said: “I agree with you, and I’m trying to correct that.”

Barnett Waddingham senior consultant Malcolm McLean thinks that Altmann was talking about the lack of information surrounding the changes, rather than a mis-selling of the product.

“If she did mean that the state pension was mis-sold, that has legal implications and we will have to wait and see what comes of that,” he said.

On being questioned by Garvey about women who feel aggrieved being in need of financial help, Altmann replied: “It’s not as if this wasn’t thoroughly and fully debated through our democratic process, and in the end, the majority in parliament made a decision – it’s in law, and there’s nothing that I can do to change it.”

Souce: Reproduced from Professional Adviser magazine