State pension forecasts may be wrong
21 February 2017
A digital service launched by the Department of Work & Pensions (DWP) last April allows people to check their state pension forecast, but their accuracy is in doubt.
More than 2.5m people have already used the online service which was launched when the new state pension was introduced. It allows anybody to log in, type in some personal details and find out a key figure - how much their state pension will be worth each week.
According to an article in The Sunday Times the issue affects those who chose to “contract out” of defined-benefit workplace pension schemes. Those who did this will receive a basic pension entitlement and a payment from their contracted-out Serps entitlement.
However it is reported that the DWP is using the wrong rates to calculate the value of contracted-out state pensions because HMRC has failed to provide the DWP with correct data on workplace pension schemes, resulting in the miscalculation of people’s state pensions.
HMRC said pension scheme administrators are responsible for ensuring records are up to date and that it was “working flat out to action all guaranteed minimum pension reconciliation requests as quickly as possible.”