Govt admits its pension forecasts have ‘significant’ inaccuracies

Up to 360,000 UK pension savers may have received incorrect information, with some people told they would receive up to £1,500 a year more than they were actually paid.*

Mr Opperman admitted 3 per cent of the 12m government forecasts could be false in a letter to the former pensions minister, Sir Steve Webb, who helped uncover the scandal with the Daily Mail’s This Is Money.

The incorrect forecasting resulted from inaccuracies in data held by HM Revenue & Customs, but the underlying cause is still unclear.

Sir Steve, now director of policy at Royal London, said it was worrying that the new pensions dashboard was experiencing data problems as pension savers are increasingly encouraged to use online services by the government.

Now that the government is aware of the scale of the problem, it must put an urgent stop to the issuing of incorrect statements

Sir Steve Webb, Royal London

“It is 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,” he said.

Sir Steve called on the government to clean up its mess and give pension savers clarity. “Now that the government is aware of the scale of the problem, it must put an urgent stop to the issuing of incorrect statements,” he said.

He urged Mr Opperman to undertake a “root cause analysis” to identify the source of the inaccuracies, adding: “Individuals need to have confidence 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.”

Stephen Scholefield, a pensions lawyer and partner at Pinsent Masons, said it would be difficult for pensioners left feeling short-changed to reclaim income through legal action.

"From a legal point of view, it will be very difficult for those who 'lose out' to make a successful claim. They will still get what they are strictly entitled to receive and it will be difficult to show that they have made irreversible decisions based on an incorrect online forecast," he said.

Mr Scholefield said that the miscalculations further undermined confidence in the UK's pension system. "Unfortunately it does little to instil confidence in the pension system, which already has trust issues to address."

He added: "It is a good heads up to those involved in the pension dashboard project to think carefully about how to deal with the complexities of underlying data and highly individual calculations."

A Department for Work and Pensions spokesperson acknowledged the errors and apologised to those affected. “We are aware that a small proportion of online state pension forecasts may have been affected by errors.”

They continued: “We apologise to those affected for the inconvenience. Our officials are working urgently with HMRC to make sure this problem is resolved as quickly as possible.”

*An earlier version of this article incorrectly asserted that members had been given incorrect advice by the Money Advice Service. While the MAS links to state pension forecasts, this information is provided by HM Revenue and Customs, and we are happy to correct the record.