Timms demands changes to GMP factsheet after public’s criticism

The DWP was compelled to publish a factsheet following a Parliamentary and Health Service Ombudsman’s determination in 2019, which found that the department had failed to inform people about the adverse impacts on their state pension due to the decision to end the indexed GMP top-up when the new state pension was introduced in 2016.

The PHSO ruled that the document should “explicitly tell people to check their circumstances” and “provide details to the public about how they can do this”.

The committee is concerned that, now six years on from the NAO report, it is still the case that some people with GMPs negatively affected by the new state pension reforms ‘have not been able to find the information they need’

Stephen Timms MP

However, as Pensions Expert reported in October 2020, the government was delayed in complying with the PHSO ruling.

When the document was eventually published in August 2021, the DWP pledged to conduct a six-month review. Then, in response to a letter from Timms, Peter Schofield, permanent secretary at the DWP, confirmed in February that no one had written to the department requesting compensation, and only four people in total had written to the department as a result of the factsheet.

Timms wrote again to the department on May 11, following the end of the factsheet review in March. The review concluded that, despite the low response rate, there was no evidence to suggest a further iteration of the factsheet was required, nor was there a trigger for further research — conclusions with which Timms took issue.

A poorly worded document

In his letter, Timms wrote that the committee had received a “steady stream” of feedback from members of the public voicing concerns about the factsheet, suggesting that a revised version was needed.

Members of the public suggested that the factsheet was “insufficiently clear about the potential impact and that people may be eligible for compensation”, Timms explained.

As an example, he said that to illustrate how the new state pension could negatively affect someone with GMP entitlement, “the factsheet quotes a small weekly loss of 70p a week” (based on someone with a weekly GMP of £35 in 2015 and inflation of 2 per cent), before adding that the loss can build up overtime and that “somebody with a large GMP reaching state pension age from April 2016 to March 2017 could have a notable loss over their whole retirement”. 

“We are concerned that this is insufficient to alert people to the potential scale of the loss, given that complainants to the PHSO ‘anticipated losing out on payment of many thousands of pounds’,” Timms said.

Additionally, he said that the factsheet refers to someone reaching state pension age in 2016-17 potentially losing out “when, according to the department, the target group for it reached state pension age between 2016 and 2021”. 

“Furthermore, the example is from a time when inflation was low, and inflation being above 3 per cent is a factor which can contribute to people being comparatively worse off,” he added.

Timms criticised the wording of the factsheet for simply encouraging people to contact the DWP if they would like “advice about what difference the factors have made to their state pension”, rather than explaining “that people might be eligible for compensation, or in what circumstances and what the route would be for getting it”. 

Some members of the public had written to the committee expressing their frustration with the claims process, one saying he had petitioned the department for compensation but been ignored, and another saying they had been unable to locate any link or advice from the DWP about where and how to apply for compensation.

Timms wrote that the committee “would be grateful for an explanation of the circumstances in which an individual in the target group for the factsheet may be eligible for compensation and what steps they should take to get it. This should be included in a revised version of the factsheet”.

Factsheet hidden from the public

Additionally, he pointed out that the review found that the factsheet had “limited success” in reaching its target group, based on the absence of applications and the paucity of letters received by the department, and on analytics data showing “very low” page views and searches of the factsheet online.

Members of the public had complained that the factsheet was placed on the government’s website under its section on public service pensions “when it is not in fact relevant to members of such schemes as they have full inflation protection”, Timms continued.

“Another told us that they only became aware of it after looking through the correspondence between the committee and the DWP on the committee’s website. They said ‘how anyone affected was expected to know it was there I will never know. There was no press release or other publicity to encourage the large numbers of people affected to look at the gov.uk site factsheet’,” he said.

“Yet another person pointed out that some pension schemes were unaware of the factsheet. One referred on its website to GMP indexation being partly delivered through ‘increases each year added to your state pension’, without distinguishing between people who reach state pension age before and after April 6 2016.”

He added that the committee “would be grateful for an explanation of what the department is doing to improve its ability to identify individuals affected by state pension changes and to provide them with full, clear and relevant information. We would also be grateful of an explanation of the steps DWP now intends to take to promote a revised version of this factsheet to both individuals and occupational pension schemes”.

Timms also criticised the review for omitting important metrics that Schofield had previously said would be included, such as a “thematic review of feedback” and “the review of contacts to see if they were from people in the target group”.

“To conclude, the committee is concerned that, now six years on from the [National Audit Office] report, it is still the case that some people with GMPs negatively affected by the new state pension reforms ‘have not been able to find the information they need’,” he said. 

“In light of this, will the department revisit its decision not to review the factsheet and commit to improving its content so that it better meets the needs of those affected and promoting it better? This committee would be grateful for sight of a suitably revised version of this factsheet before it is published.”