MSE News

Warning: Double-check state pension forecasts after Government admits 'significant' errors

The Government has admitted to a "significant" problem with projections made by its check your state pension service – if you've used it, you should confirm your state pension forecast is accurate before making retirement plans.

Data errors and omissions mean the online service may have provided 360,000 incorrect forecasts over the past three years to savers looking to find out what income they would get in retirement.

The shocking estimate emerges from a letter from Pensions Minister Guy Opperman to Sir Steve Webb – who previously held the same job – and comes after Sir Steve highlighted some individuals received online and written forecasts for their state pension that differed by more than £1,500 a year.

While the number of people affected by this problem is now less than it used to be – errors are down from 10% in 2013/14 to 3% – it's still important to check if you've been impacted.

Read MSE's guide to the State pension: how it works and Pension need-to-knows.

Who is affected by the issue?

How much state pension you are entitled to depends on your national insurance (NI) record, which generally depends on how many years you're in work and paying NI.

The letter suggests that people with a "complex" work history who have transferred between employers' "final salary" pension schemes – schemes where the amount you get is based on the number of years you worked for a single employer and your final salary – are most at risk of inaccuracies in their state pension forecasts.

It says: "[People] may find there is a difference between their online forecast and any paper forecast they receive." It adds that in these cases, officials have intervened to ensure the paper forecast is accurate.

Sir Steve says that people with final salary pensions, who were "contracted out" of the second state pension when they were working, are particularly likely to be affected by the errors. This is where some of an individual's NI contributions were diverted into their workplace (or personal) pension, potentially reducing their state pension entitlement.

What can you do to get an accurate forecast? 

Here are's top tips for checking the accuracy of your state pension forecast:

  • Compare your latest forecast against previous ones and question any big changes.

  • Check 'contracted out' figures if you know you were in pension schemes of this kind.

  • If you have any questions about your forecast, speak to the Government's Future Pension Centre until you understand it. You can phone it for free on 0800 731 0175 or write to it at The Pension Service 9, Mail Handling Site A, Wolverhampton, WV98 1LU.

  • If an online forecast doesn't seem right or is inconsistent with a previous written statement, ask for an up-to-date written statement so that you can be more confident the information it contains is correct.

However, especially for people who are years from retirement, state pension forecasts should also be seen as something of an estimate. What you actually receive when you retire may be different, particularly if you continue to build up your NI record, or if the state pension system changes in the future.

To stay on top of all your pensions, see our blog for how to keep track by setting up your own pensions dashboard.

What's the Government doing to fix the problem?

Despite up to hundreds of thousands of people receiving inaccurate forecasts, Opperman's letter insists that no one will receive an incorrect amount of state pension.

Opperman claims that omissions or errors in NI records will be corrected before people retire and that HM Revenue & Customs is continuing to improve the accuracy of NI records.

He wrote: "We recognise the need to continue to improve data quality. Therefore, I have asked officials to explore options to further enhance the accuracy of the information held with NI records and how we use that information to calculate a person's state pension forecast."

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