Millions of people may have received inaccurate forecasts from the government’s online state pension calculator, according to a new investigation.
The Sunday Times reports that those with defined-benefit workplace pensions may have had the value of their contracted-out state pensions calculated using the wrong rates.
Find out more: state pension video guide – the new rules explained in detail
What’s the problem?
Those who contracted out of their pension are deemed to have a payment included in their scheme(s), referred to as the Contracted Out Pension Equivalent (COPE). It is shown in the scheme as a Guaranteed Minimum Pension (GMP).
If a member left the scheme, a set rate was applied re-evaluate this element of the pension.
However, in some cases, the Department of Work and Pensions state pension forecasting tool has calculated this rate inaccurately.
It could mean up to five million people have received state pension forecasts that are way off the mark.
Commenting on the Sunday Times’ report, a DWP spokesperson said: ‘A digital statement provides an estimate of what a person is likely to receive from the state pension based on the information provided by HMRC at the time of their request.
‘If their national insurance record is then updated, the amount will change to reflect this.’
How to calculate your state pension
The rules on how much state pension you can get are complicated – and they all changed in April 2016.
Our video guide explains how much state pension you’re likely to get, based on your National Insurance contributions (NICs) and when you qualify to receive it.
As well as getting a state pension statement using the DWP online calculator, you can also request one via phone by calling 0345 3000 168.
If you prefer, you can request it by post by writing to The Pension Service 9, Mail Handling Site A, Wolverhampton, WV98 1LU.