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Pensions minister admits pension forecast errors

Pensions minister Guy Opperman has admitted “significant” problems with a third of a million incorrect state pension forecasts issued in a letter to Royal London policy director Steve Webb.

Since 2016, government figures suggest that over 12 million state pension forecasts have been issued and Opperman’s letter suggests that 3 per cent of those may be erroneous because of problems with HMRC data.

Members of the public have reported receiving online statements which are inconsistent with earlier written statements, with the more recent online statements being incorrect.

The issue came light when individuals, identified by the This is Money website, working in partnership with Webb, reported receiving incorrect or inconsistent forecasts.

In some cases, new forecasts were more than £1,500 a year higher than had previously been expected.  These cases were raised with DWP who initially said that these were isolated errors which had now been corrected.

But Webb wrote to Opperman asking him to undertake a “root cause analysis” to identify if there was a systematic problem underlying these incorrect statements.

Royal London says 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.

Although accuracy rates are improving, the Opperman says that more work will now be done to try to improve accuracy.

Commenting on the findings Royal London director of policy Steve Webb says: “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.”

In response a DWP spokesperson says: “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.”

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Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Julian Stevens 4th June 2019 at 1:49 pm

    Stick ’em on the Pensions Dashboard, that’ll sort it all out.

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