State PensionJul 24 2019

Govt in disarray over state pension errors

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Govt in disarray over state pension errors

HM Revenue & Customs told FTAdviser in a Freedom of Information request it does not hold any data on the changes to people's state pension forecasts after discrepancies were raised by consumers.

But in May, the minister for pensions and financial inclusion, Guy Opperman, had told Parliament that the Department for Work and Pensions did not have this data either, as it had referred it on to HMRC for investigation.

FTAdviser reported in January 2018 that some of the state pension forecast could be showing incorrect amounts, especially for people with contracted out benefits.

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

Royal London published a letter from Mr Opperman in June which stated that currently about 3 per cent of people are impacted by errors in their state pension estimates, which corresponds to about 360,000 individuals.

At the time, he explained that forecasts were based on HMRC national insurance records, which "can never be perfect".

But the taxman told FTAdviser that it does not "investigate discrepancies in state pension forecasts, this responsibility would sit with colleagues in the DWP".

HMRC administers the collection of national insurance contributions through its tax systems and investigates any queries arising on national insurance records.

Since 2016, more than 12m forecasts have been issued through the DWP’s online service Check your State Pension.

If a customer identifies incorrect gaps in their NICs record, this online page will advise them where they might direct their query within HMRC.

According to the taxman, approximately 3.7m customers checked their NICs record online during 2018-19.

"Where individuals become aware of a discrepancy, we advise them to submit their P60 to HMRC for their records to be updated," it noted.

DWP declined to comment on this matter.

Sir Steve Webb, director of policy at Royal London and former pensions minister, argued that it was "a symptom of the lack of joined-up government that two departments are saying apparently contradictory things about this issue". 

He said: "From the point of view of the citizen, they do not care which department fixes the problem, they just want a reliable state pension forecast. 

"The scale of the problem has had to be dragged out of the government. Now they need to be more open about what they are doing to fix it."

Brian Hill, managing director and financial planner at Jones Hill, argued that it is clear that "hundreds and thousands of people who rely on DWP data being accurate have been left feeling rather more tarnished".

He said: "The DWP needs to be more joined up and ensure it's services are built around user's needs."

maria.espadinha@ft.com

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