Friday, July 19

Thousands hit by pensions blunder



Pensions Minister Guy Opperman has been forced to admit there are significant problems as hundreds of thousands of people have received incorrect state pension forecasts.

People are encouraged to go online and get a state pension forecast to find out how much we will receive and when. Changes to the state pension age and a complex system means not everyone gets the same amount at the same age.

More than 360,000 people have been issued with online forecasts saying they will be getting a higher amount than they are actually entitled to.

This is due to problems with HM Revenue & Customs data on National Insurance records, which are used to calculate how much state pension we each get. You need 35 full qualifying years to receive the full state pension of £168.60 per week.

In some cases, forecasts were more than £1,500 a year higher, according to former pensions minister Steve Webb who has been investigating this issue.

After he raised the problem with the Department for Work and Pensions who played it down as isolated errors, he contacted the Minister for Pensions asking him to investigate.

In a letter to Mr Webb, Opperman admitted there are problems, especially for members of workplace pensions who have complex work histories.

He said he has asked officials to explore options to further enhance accuracy. Analysis has identified that currently no more than 3% of people will be impacted by the issue you have raised. Ommission or errors will be rectified before they retire.

However, I nonetheless recognise there is a significant problem here.

A DWP Spokesperson said: We are aware that a small proportion of online State Pension forecasts may have been affected by errors.

We apologise to those affected for the inconvenience. Our officials are working urgently with HMRC to make sure this problem is resolved as quickly as possible.

Steve Webb, now director of policy at insurance giant Royal London, said: People are increasingly encouraged to use online services to help plan their retirement, and the new pensions dashboard will rely heavily on such data.

It is therefore very worrying that hundreds of thousands of people may have received incorrect state pension forecasts and in some cases will have taken decisions about their retirement plans on the basis of incorrect information.