Could YOU be a victim of the pension payback scandal?

Tens of thousands wrongly overpaid pensions ++ Many facing shock demands to hand the cash back ++ And the question...

TENS of thousands of retirees face losing vital income following a surge in pension blunders, a Money Mail investigation can reveal.

Sweeping reviews of pension calculations have uncovered tens of thousands of errors that have seen pensioners overpaid, and underpaid, for decades.

Now many have been hit with sudden demands for money they had no idea they were not entitled to and trapped in lifestyles they can no longer afford. At the same time, complaints about pension errors have soared.

In 2010, the Pension Ombudsman ruled on just nine complaints about mistakes. But last year, it ruled on 165 — a rise of 1,733 pc.

Many errors, some dating back four decades, stem from when those in final salary pension schemes were ‘contracted out’ of paying full state pension contributions, and allowed to pay reduced National Insurance rates between 1978 and 1997.

These pledged to pay a Guaranteed Minimum Pension ( GMP) in retirement to replace the loss in state pension pay. But when contracting out was banned in 2016, pensions schemes began to compare data with HM Revenue and Customs and found many mismatches — mainly due to poor record keeping and human error. Many final salary and state pensions pay packages have now been cut as a result of discrepancies uncovered.

The Civil Service Pension Scheme alone, which has one million members, found 10,000 pensions with errors and overpayments of £22 million.

Pension schemes are now trying to claw back the overpayments — even if the money has already been spent. SOME

pensioners have had their income slashed twice — once down to the pay they should have had, and again to recoup overpayments. Baroness (Ros) Altmann, a former pensions minister, says: ‘I have been concerned about pension errors for years, but what is happening now is errors are finally being discovered because of the GMP issue in the new state pension.

‘The mistakes were made by administrators, actuaries or HMRC, not by pension members, yet the members are forced to pay for the mistakes they didn’t make. This seems really unfair.’

One retired primary school administrator, 84, was recently told her annual pension was to be cut by £715 after an error was found in GMP records.

The pensioner, who did not want to be named, says: ‘It is a huge amount to be reduced by. How confident can I be that the new figure is correct?’ Meanwhile, the NHS Pension Scheme, which has close to one million retirees, made 46,600 overpayments in three years to April 2019, totalling £53 million. The average was more than £1,100.

More than £30 million of overpayments were put down to ‘revisions’ — which include errors. It included £18 million of overpayments that occurred when the member died and the pension was paid before family could notify the NHS.

A retired teacher complained to the Ombudsman after miscalculations from the Teachers’ Pension Scheme led her to quit her job three years before she turned 60. She was told she would receive £9,646 a year, but after she retired early, she was told she would get just £9,060.

She now faces having to go back to work until she can collect her state pension in 2024.

The ombudsman only partially upheld her complaint as she had not suffered financially because she was never entitled to the money. But it did order the Teachers’ Pension Scheme to pay her £1,000 for the ‘serious distress’ it caused.

Another retiree complained after Aon overestimated the size of his pension with Canada Life — leading him to take on a mortgage, help his daughter buy a house and go on ‘several expensive holidays’. He had been told he would get a pension of £41,700 a year with a maximum lump sum of £215,000.

But in 2018, he was told he would get £34,000 and a £193,800 lump sum. The ombudsman again only partly upheld his complaint, ordering Aon to pay him £1,000.

A widow who had been receiving her late husband’s Civil Service pension also complained to the ombudsman after administrator Capita tried to claw back payments it continued to make after she told them she had remarried.

She received more than £12,000 over four years before she was asked to pay it back in just two weeks. But the Ombudsman ruled she should not have to pay it back after hearing she had reduced her working hours and taken on a new mortgage to be nearer family.

Steve Webb, director of policy at Royal London, says: ‘It is frustrating for pension scheme members when they have lost out due to poor administration and were unable to resolve the matter with the scheme and so had to go to the Ombudsman.

‘It is worrying that more and more people each year make complaints about pension administration, and schemes and administrators need to improve the way they handle these complaints.’

The Department for Work and Pensions (DWP) has said it will not recover overpaid state pension that is linked to GMP errors. In the summer, the pensions minister revealed the government had sent out around 360,000 inaccurate state pension forecasts. Guy Opperman said inaccuracies affected 3 pc of 12 million forecasts issued by the DWP’s ‘Check your State Pension’ service.’