A DWP minister has provided an update about a major state pension error. The ongoing issue has resulted in many people being told they would get more than they were actually on track to receive.

State pension payments are increasing from April 6 in line with the triple lock, with the full new state pension rising to £241.30 a week, or £12,548 a year. As the DWP payments form an important part of many people’s retirement plans, it’s important to know how much you are on track to get.

However, there is an error with the state pension forecast tool on the Government website, with many people being issued incorrect forecasts. DWP minister Torsten Bell was recently asked about the problem by the Work and Pensions Committee.

Inflated predictions

The group of MPs asked about how “some state pension forecasts may be inflated due to an HMRC error”, as the forecast “did not show deductions where people were contracted out before 2016”.

In response, Mr Bell confirmed the problem is “to do with customers who were contracted out and therefore would have been receiving the kind of equivalent of their earnings-related part of their state pension through their private pension system”.

He said: “The system that was providing state pension forecasts – admittedly, with caveats, to be fair to the last Government, it would have been clear that it was not like an entitlement – provided forecasts that did not take into account that contracting out had taken place in all cases.” The minister said he didn’t know how many people had been affected.

We don’t know how many were affected

Mr Bell said: “I cannot tell you exactly how many people have been affected, because that will depend on how many people used the forecast model. We are obviously looking at that, but no one can give you a number for, ‘We know this many people in this year’.”

However, he was able to talk generally about what group of people is affected. The minister explained: “We are talking about largely people contracting between 2016 and about 2021. That is the phase we are talking about.”

He also spoke about what is being done to fix the mistake. Mr Bell said: “First, the previous Government stopped providing forecasts and encouraged people to ring instead, when they were worried that people might be affected by this some time ago. And then secondly, we have now put in place permanent fixes that mean that people are getting forecasts that take into account their contracting-out status.”

How many people have been affected by the state pension forecast error?

Estimates suggest up to 800,000 people may have been shown figures that were too generous. Some were told they were on track to get the full state pension when in fact they were not.

Ministers were first told about the issue back in 2017, yet fixes were not fully put in place for another four years. The error has now been fixed for those who reach state pension age before April 2029.

But HMRC has warned that people reaching state pension age after this date may still be affected. The state pension age is increasing from 66 in stages from April 2026, to reach 67 by April 2028.