With the provisions to increase NMPA set out in the 2021/22 Finance Bill, this change will directly affect the retirement options for those currently in their mid to late forties. However, only 18% of working people aged between 40-49 are aware that the NMPA is set to increase from 55 to 57 in 2028.
The research also found that 78% of people in this age group believed that the Department for Work and Pensions (DWP) should have communicated this change in policy more effectively.
Commenting on the findings, PMI President Lesley Alexander said: “The results of this research are particularly worrying, as they suggest strongly that the DWP has failed to make the general public aware of a significant change in pensions policy. This news comes just six months after the Parliamentary and Health Service Ombudsman (PHSO) judged that DWP was guilty of maladministration over its failure to provide adequate notice of the change to State Pension Age (SPA) for women born in the 1950s. Many of those seeking to draw benefits as soon as possible may be shocked to learn that they will have to wait. There is very real potential for another embarrassment.”
The increase to the NMPA is complicated because it will not apply to everyone. For those earning benefits in a public service pension scheme, and those who are members of some private sector arrangements, NMPA will continue to be 55. Just over a third of those polled (35%) considered this difference to be unfair.
After learning about the change in the NMPA, almost four in ten respondents (38%) expect they will be impacted. A further 25% don't know whether the change will affect them.
Lesley Alexander added: “The failure to communicate the change to NMPA effectively is complicated by the fact that it does not apply to everyone. This means it is vital that the general public understands clearly what their retirement choices are. With the pensions dashboard due to arrive in 2023 – giving people the chance to review all their pension savings in a single place – it will only cause confusion when people learn that they will become eligible to draw benefits at different ages. The need for a new communication programme to explain this to the public has become urgent.”
The PMI's research also showed a wider lack of pensions preparation amongst people in their 40s. Only 4% of respondents could correctly identify the current NMPA and just 14% had spoken to a financial advisor about planning their retirement.
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