Hundreds of thousands of savers given wrong state pension forecast
A letter from pensions minster Guy Opperman to his predecessor Steve Webb reveals as many as 360,000 incorrect forecasts may have been issued since 2016.
According to Webb, some forecasts were more than £1,500 a year higher than had previously been expected.
Webb wrote to Opperman asking him to identify if there was a systematic problem underlying these incorrect statements after the Department of Work and Pensions initially said the errors were isolated.
The pensions minister’s reply reveals a more widespread issue.
In his letter to Webb, who is now director of policy at Royal London, Opperman wrote: “Analysis has identified that currently no more than 3 per cent of people will be impacted by the issue you have raised.
“It is also important to note that omission or errors will be rectified before they retire. However, I nonetheless recognise there is a significant problem here.
“I have asked officials to explore options to further enhance the accuracy of the information held with National Insurance records and how we use that information to calculate a person’s State Pension Forecast.”
Government figures suggest over 12 million state pension forecasts have been issued in the last three years.
Webb 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.
“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”.