My forecasts all stated I might get a FULL state pension, so why should I pay additional STEVE WEBB replies

I am trying to find some help in relation to my pension entitlement, due to commence in May 2026.

I wrote to DWP before retiring from the police service in 2010 to enquire about my State pension. The reply confirmed that I was entitled to a FULL state pension.

Since my retirement, I have regularly logged into the Government Gateway site to confirm the situation, and records clearly showed that I had 38 full contributory years, am entitled to a FULL state pension, and cannot improve the situation.

Two years ago, when accessing the Government Gateway site, I was confronted with a message stating that my case was ‘under review’. I had no idea why.

I did eventually re-gain access to the site to find a message stating that I would now need to purchase several years worth of additional contributions in order for me to gain a full state pension.

I have contacted DWP on multiple occasions, written to my MP and made a formal complaint about this, all with no success.

DWP replies centre around the fact that legislation changed in 2016, and, as a result, I would now need to buy back several years worth of contributions in order to receive it.

I find it difficult to accept that DWP confirmed in writing to me as early as 2010 my entitlement to a full pension, and this message has been repeated continuously on the Government Gateway site until mid 2024.

I suspect that my individual case may be indicative of a much wider problem in the exchange of information between NI and DWP, and that it could affect large numbers of individuals, all of whom are expecting to receive a full state pension.

Steve Webb replies: Having looked into the paperwork you have shared, it is clear that you have received two inaccurate state pension statements, for which HMRC has now apologised.

Your experiences have important implications for any reader who is still relying on a state pension statement obtained some years ago.

It may be helpful if I respond first to your question about the forecast you originally received back in 2010, before a new state pension system had even been considered, and then the forecasts you have received since the rules changed in 2016.

In your case, the information that you received in 2010 was correct, and remains correct to this day.

Prior to 2016 it was necessary to have 30 years of contributions to build up entitlement to a full *basic* state pension, currently worth £184.90 per week.

You already had 30 years by this point, so you were rightly told you could not get more basic pension than this.

You did not get any ‘additional’ state pension (often called SERPS) because the police pension scheme (of which you were a member) was ‘contracted out’ of SERPS.

I can reassure you that nothing has changed with regard to this original forecast. 

Regardless of the 2016 changes (of which more below), you are guaranteed to receive at least a 100 per cent old style ‘basic pension’.

However, in 2016 the rules changed and you now have an extra option. You can do nothing and receive exactly the pension you were promised back in 2010.

Or, as you have finally now been advised, you can make further contributions and build up towards a *much larger* state pension – the new state pension currently worth up to £241.30.

It is important to stress that you lost nothing by this rule change. The old basic pension you were always going to get hasn’t been taken away.

But you have the opportunity to build something bigger, and it’s up to you if you want to pay extra contributions to reach this increased figure.

However, what has muddied the waters considerably is that in 2020 and 2021 you applied for state pension forecasts and these *wrongly* told you that you would now get the full new state pension without any further contributions.

These statements were wrong because they failed to take account of your years of contracting out into the police pension, which should have resulted in a deduction from the full rate.

On the brink of retirement, you have finally now received a correct forecast, which is lower than the full flat rate for this reason.

It is quite shocking that you received incorrect state pension statements on two separate occasions.

This is a warning to anyone relying on state pension statements from years ago that they should obtain an up-to-date forecast to make sure that the information on which they are basing their financial plans is still correct. Check your state pension here.

Whilst the majority of forecasts have always been accurate, a substantial minority are known to have been incorrect, and these errors were because for some people (such as yourself) periods of ‘contracting out’ had not been reflected in the forecast.

HMRC has been working on this problem and I understand that the latest computer update should mean that new forecasts should be accurate.

But this still means that anyone relying on an older forecast, and particularly one received between 2017 and 2021, may be depending on something which is not accurate and should get an up-to-date forecast as soon as possible.

One reason why it is worth getting a new forecast is that it may be possible for someone to pay voluntary NICs to top up their pension.

But if they are wrongly told that this is not possible, then they may miss the opportunity to do so for any year beyond the six year deadline.

I’m pleased to say that HMRC has said that it will extend that six-year deadline in cases such as yours, so that you can still top-up older years in exactly the same way that you could have done had you received an accurate statement back in 2020.

DWP has now written to you setting out your options in this respect.

I contacted DWP and HMRC on your behalf and a Government spokesperson said: ‘We’ve resolved an issue with the state pension forecast tool which affected some customers with contracted-out deductions, and apologise to your reader and others who were impacted.

‘State pension payments remained correct, and anyone with contracted-out deductions who is eligible to increase their pension by making voluntary contributions may still do so.’