State Pension 

Government reveals scale of pension errors

Government reveals scale of pension errors

About 360,000 individuals received wrong state pension forecasts from the government, the pensions minister has revealed.

In a letter to Sir Steve Webb, former pensions minister and director of policy at Royal London, Guy Opperman said currently about 3 per cent of people will be impacted by errors in their state pension estimates.

Since 2016, more than 12m forecasts have been issued through the department for Work and Pensions' online service Check your State Pension.

However, according to Royal London, some of the online statements are inconsistent with written statements people have received, with the more recent updates in particular being incorrect. 

The pensions minister stated that omission or errors will be rectified before these individuals retire.

He said: "Those with a particularly complex work history, where they have transferred between defined benefits schemes, may find that there is a difference between their online forecast and any paper forecast they receive.

"In these cases, what has happened is that, for the paper version of the forecast, our staff have intervened to ensure it is correct.

"When this happens, we work with HM Revenue & Customs to update their work history and provide a revised state pension forecast.

"The correction of their record as a result of this means their on-line record will be accurate for the future."

Mr Opperman explained that forecasts are based on HMRC national insurance records, which "can never be perfect".

But the government has been making progress. The taxman improved from 10 per cent of cases requiring corrective action in advance of state pension age in 2013-14 to the current 3 per cent.

The DWP depends on HMRC to know the number of errors in these forecasts, as the department doesn’t hold data on the number of inquiries about this issue.

Mr Opperman also noted that the government recognises the "need to continue to improve data quality" and he has asked officials to explore options to further enhance the accuracy of the information held with national insurance records and how the DWP uses that information to calculate a person’s state pension forecast.

According to Sir Steve, people are increasingly encouraged to use online services to help plan their retirement, and the new pensions dashboard will rely heavily on such data. 

He said: "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. 

"Now that the government is aware of the scale of the problem, it must put an urgent stop to the issuing of incorrect statements. 

"Individuals need to have confidence that the information they receive from the government is accurate and should not have to live with the uncertainty that a statement they have already received may be seriously incorrect."