Thousands hit by state pension blunder

INCORRECT state pension predictions have been given to hundreds of thousands of people, the Government has admitted.

Pensions minister Guy Opperman says a ‘significant problem’ has seen some workers wrongly told to expect a retirement income up to £1,500 a year higher than the reality.

It is understood that more than 12 million forecasts have been issued since 2016 — with up to 3 pc now believed to be inaccurate.

The blunder means around 360,000 people may have been budgeting for a pension income they will never get.

The errors have been made in online forecasts that allow workers nearing retirement to calculate their expected state pension.

Mr Opperman revealed the scale of the problem in a letter to former pensions minister Steve Webb, now director of policy at mutual insurer Royal London.

Mr Webb had written to him to raise concerns after readers of Money Mail’s sister site This Is Money reported receiving online statements that differed to written forecasts they’d received years earlier.

The minister wrote in reply: ‘As a former pensions minister, I am sure you will recognise that HMRC records can never be perfect — there will always be a residual level of error in the system. But we are making progress with this.’

He added: ‘Importantly, no one will receive an incorrect amount of state pension.’ In some cases, the inaccurate online forecasts were more than £1,500 a year higher than those sent in the post.

The minister’s reply suggests that those who have been members of defined benefit pension schemes with ‘ complex’ work histories are most at risk.

Mr Webb says: ‘Individuals need to have confidence 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.’

A Department for Work and Pensions spokesman says: ‘Our officials are working urgently with HMRC to make sure this problem is resolved as quickly as possible.’