Pensions Minister Guy Opperman has admitted ‘significant’ problems with incorrect state pension forecasts in a letter to Royal London policy director, Steve Webb.
The issue came light when individuals, identified by the ‘This is Money’ website, working in partnership with Steve Webb, reported receiving incorrect or inconsistent forecasts. In some cases, new forecasts were more than £1,000 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.
However, Steve Webb wrote to the Minister for Pensions asking him to undertake a ‘root cause analysis’ to identify if there was a systematic problem underlying these incorrect statements. The Minister’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 Minister says that more work will now be done to try to improve accuracy.
Commenting on the findings, Steve Webb, Director of Policy at Royal London 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”.
Notes to Editors
Full text of the letter from the Minister to Steve Webb is available on request.
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About Royal London:
Royal London is the largest mutual life insurance, pensions and investment company in the UK, with assets under management of £139 billion, 8.6 million policies in force and 4,348 employees. Figures quoted are as at 30 June 2020.