The Work and Pensions Committee (WPC) has raised concerns around the Department for Work and Pensions' (DWP) "failure" to adequately communicate the impact of guaranteed minimum pension (GMP) indexation changes.

WPC chair, Stephen Timms, shared concerns around the "longstanding issue" in a letter to Pensions Minister, Paul Maynard, ahead of the new minister's first scheduled appearance before the committee on 10 January.

In particular, Timms argued that the DWP failed to adequately communicate the impact of the new state pension on people with large GMPs who reached state pension age under the early years of the new state pension (between 2016 and 2021).

This is despite the need to communicate the impact better having been raised with the department as far back as 2016, when the new state pension was introduced.

Indeed, Timms pointed out that the predecessor WPC said in March 2016 that general awareness raising would not be enough and called on the department to identify the individuals affected, assess their potential losses and communicate with them.

In the same month, the National Audit Office said people were likely to lose out and had not been able to find the information they needed, raising concerns that the department had limited information about who was affected.

In addition to this, in August 2019, the Parliamentary and Health Service Ombudsman (PHSO) said that people affected would not have been aware through DWP’s literature that the new state pension reforms could impact negatively on them over time, urging the DWP to review its communications and explicitly tell individuals to check their circumstances.

In response to the ombudsman’s report, in August 2021 the department produced the GMP factsheet.

However, Timms argued that this was too late in terms of enabling those affected to understand the impact on them and take it into account in their retirement planning.

He stated: "In May 2022, the committee wrote to the department to say that a steady stream of communications from members of the public suggested that a revised version of the factsheet was needed to better explain the potential impact on individuals, particularly, as inflation rose.

"It was insufficiently clear that individuals might be eligible for compensation and how to apply.

"Further, placing the factsheet on GOV.UK and hoping people find it was a wholly inadequate strategy for getting important information to people who needed it.

"Some people had only found out about it having heard me speak about it in parliament or finding the correspondence on the committee website.

"The nature of the department’s communication on this issue—both in terms of the content of the factsheet and the attempts to bring it to the attention of those affected—continues to be of concern to the committee."

Given this, Timms asked Maynard to report back on his own reflections on the DWP's learnings from this experience.

Timms also raised queries around the criteria for compensation, revealing that he was "disappointed" to hear that a RMT union member had been offered £250 consolatory payment, and told that a further consolatory payment for gross inconvenience was not appropriate when they challenged the amount.

"There is no reference to the individual’s entitlement under the new and old State Pension, nor any analysis of whether they had suffered the type of injustice identified by the PHSO," Timms continued.

"The payment appears to bear no relation to any loss the individual might have incurred, due to the maladministration. Instead, the length of time taken to respond to the complaint appears to be the determining factor.

"I would be grateful if you could confirm the criteria used for determining the amount of compensation in such cases and whether you intend to include this in the factsheet.

Maynard will appear before the WPC for the first time in his new role on 10 January, alongside DWP DB policy division deputy director, Fiona Frobisher, and Economic Secretary to the Treasury, Bim Afolami.

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