Examination of Witnesses

Part of Pensions Bill – in a Public Bill Committee at 11:36 am on 27 June 2013.

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Dominic Lindley: From the consumers’ perspective, many are confused about the state system at the moment. In our survey, 60% of people do not know how much state pension they will receive, and 40% say they do not understand how it works at all. More clarity about the state pension is important because if you think about the decision that consumers have to make, they have to think about how much they are going to need in retirement and need to know how much they will get from the state, and then what options they have available to make up that gap in terms of their own contributions.

By providing a bit more certainty for some consumers, the single tier could be a positive development. I would say, do not underestimate the complexities of trying to explain the transition and the system to consumers, and start early. As you get closer to the implementation date, the people who are affected on either side of the cliff edge will become more vocal and more interested.

In terms of what consumers are asking us about the reforms at the moment, the most common question we had when it was announced was: can I defer my state pension to get the higher amount? Of course, the answer was no. That is about as far as consumers have got with engagement in the reforms at the moment, so there is a big challenge there in explaining the context to all consumers.