Pensions Minister Guy Opperman has admitted “significant” problems with incorrect state pension forecasts, leading many people to believe they will receive a higher state pension than they are due.
Since 2016, over 12 million state pension forecasts have been issued and in a letter to Royal London policy director Steve Webb, Opperman suggested that 3% of those may be false because of problems with HM Revenue & Customs data.
Opperman’s reply indicates that people who have been members of defined benefit pension schemes with ‘complex’ work histories are most at risk of having incorrect forecasts.
The extent of the issue came to light when members of the public reported receiving online statements which were inconsistent with previous forecasts. In some cases, new forecasts were reported to be more than £1,500 a year higher than previously expected.
In response to the growing problem, Webb wrote to the Pensions Minister asking for an analysis to be undertaken to identify whether there was a systematic problem underlying these incorrect statements. Although accuracy rates are improving, the Minister admitted that more work will now be done to try and improve this further.
Steve Webb said of the findings: “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.”
He added: “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.”
