A FAULT in HMRC’s online state pension forecast tool has wrongly overstated payments for up to 800,000 people.
The blunder has raised fears that some workers could be planning retirement on figures that are too high.
The tool, launched in 2016, is meant to show how much state pension you are on track to get and whether you need to fill gaps in your National Insurance record.
But it failed to reflect “contracted out” deductions for millions of employees who once paid lower NI because they were building up benefits in a workplace or private pension instead of the extra state pension, known as SERPS.
That matters because, at retirement, a deduction is applied for time spent contracted out.
The online tool did not always show this, meaning some users were incorrectly told they would receive the full new state pension — £230.25 a week at today’s rates — and did not need to pay more NI.
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Ministers were alerted in 2017 but fixes were only introduced four years later.
The error has now been corrected for people reaching state pension age before April 2029.
HMRC has admitted some forecasts for those retiring after that date may still be wrong.
Those caught up can top up missing NI years with voluntary payments of up to £907 per year, with HMRC allowing back payments to cover periods dating to 2006.
A government spokesman said: “It’s important to stress that ultimately no one’s state pension calculation has been affected.”
Lidl extra
LIDL has unveiled its seventh staff pay rise since 2023 and announced it is doubling paid paternity leave.
The extra £29million investment will see entry-level salaries rise to £13.45 an hour, increasing to £14.45 with length of service from March 1.
Lidl said new starter pay in London will increase from £14.35 to £14.80, and up to £15.30 with length of service.
It comes ahead of the national minimum wage rising by 50p to £12.71 per hour for eligible workers from April 1.
TSB boost
BANKING giant TSB has reported annual profits jumping more than a fifth as it awaits completion of its near-£3billion takeover by Santander.
The group said pre-tax profits rose 20.7 per cent to £350.4million last year, as costs fell and income rose.
Chief executive Marc Armengol will step down to head up TSB’s Spanish owner, Sabadell.
The move is set to coincide with Santander’s takeover, which is expected to happen in the first half of this year.