Pension complaints received by the ombudsman have risen from 5,251 in 2018/19 to 5,567 in 2020/21. It is thought that these figures would have been even higher had there not been a drop at the start of the pandemic, and the service is now expecting a wave of complaints as consumers catch up on what happened with their pensions in the past two years. As TPO is also stretched for funding, how can pension schemes work more effectively to relieve TPO of increasing demands?

TPO is intended to be a service used when an issue has occurred regarding a consumer’s pension and they are not happy with how their pension scheme has dealt with the situation. However, complaints that have been escalated to TPO have increased over the past three years -  and they are expected to continue to rise by 10% in 2021/22 and 2022/23. 

Pensions ombudsman Anthony Arter says that this future increase is down to deep changes in the pensions landscape, coupled with Covid-19. 

“Pension freedoms and auto-enrolment, along with the uncertainty of the economic impact of the Covid pandemic on people’s financial circumstances, will contribute to these increases. As people become increasingly aware of the pension options available to them, we can expect a corresponding increase in the number of complaints we receive,” said Arter.

According to its corporate plan, TPO is also seeing an increasing number of complex complaints concerning pensions dishonesty, but most complaints are about the way in which administration is conducted regardless of the topic area. A key strategic goal for TPO is to continue to work in collaboration with stakeholders across the pensions industry to improve standards in dispute resolution.

How and how quickly issues are addressed by pension schemes determines how many complaints are escalated to TPO. Arter says schemes should “ensure any dispute is handled quickly with timescales given for a response, and if there is a delay, explain why”. He added that errors should be rectified as soon as possible and apologised for. “It is cheaper in the long run and protects reputation,” he says.

With the changing landscape of pensions, it has become increasingly important for issues to be addressed at source. Arter says that in order to reduce the number of complaints, communication is key. “Use clear simple language. Remind members to keep hold of their scheme booklet and make sure any updates are clearly communicated and available to them,” he advises.

“It is also important to emphasise that benefit quotes are not guaranteed, they are merely a quote at a specific time and investments or other factors may change and members should not make financial decisions on the basis of the quote,” he adds.

So far, TPO has kept up with the increase in demand, closing 4,853 pension complaints last year, which is an increase of 6% compared to the previous year. 

“We continue to review our processes to identify other ways we can increase productivity, although there is always a risk that demand will outstrip available resource,” says Arter.

TPO’s budget is set annually by the Department for Work and Pensions, and the most recent budget was set lower than the previous year. Although like for like comparisons are not straightforward because of some one-off items of expenditure last year, the long-term rise in demand for the service is expected to continue - and accelerate - because of the economic disruption caused by the pandemic.

Despite efforts to increase resources to deal with the ever higher number of complaints, Arter says: “Without an increase in funding, we will not be able to recruit additional staff to deal with the increasing demand and we will have to make difficult choices concerning recruitment when vacancies occur.”

The service also relies on volunteers, who joined it when the dispute function of The Pensions Advisory Service was merged into TPO in early 2018. As of the end of March this year, TPO had just over 200 active volunteers who are pension professionals with 10 years’ experience in the pension industry. Volunteers are a vital resource for TPO, helping resolve 1,442 pension complaints last year.

“Our volunteer network is incredibly important and makes a significant contribution to the work of our early resolution service. The wealth of knowledge and experience they have across a wide range of disciplines is an invaluable resource for TPO,” says Arter.

If you are interested in becoming a volunteer you can find more information here.