Should state grant forecasts come with a warning?

Steve Webb for This Is Money



Millions of people get state grant forecasts from the Department for Work and Pensions, and rest on their correctness when formulation their finances in retirement.

This week, a reader flags up a case where her husband’s foresee was wrong, and calls on This is Money’s pensions columnist Steve Webb to advise others their statements competence be incorrect. 

Read full sum of David and Kim Deabill’s case and what the DWP said about the correctness of forecasts here.

State grant forecast: This is Money reader flags up case where a matter was wrong and asks for warnings to be added

State grant forecast: This is Money reader flags up case where a matter was wrong and asks for warnings to be added

State grant forecast: This is Money reader flags up case where a matter was wrong and asks for warnings to be added

My husband asked for a state grant matter last year and was suggested he had a shortfall having contributed for only 28 out of the 35 years. We knew we wouldn’t have the supports to make up the shortfall until this year.

Last week we called the Department for Work and Pensions to arrange to make up some of the contributions. 

They told us we would have to have a revised statement, which arrived this morning and showed he would accept £127.64 a week (on a 28 years basis) but that if he started to minister (Class 3 as he is not employed) he could boost this to £145.87.

We rang for the third time currently to arrange this and to also make up past years as minute on the state grant information website, but have been told that as he had engaged out during his practice history, the information in the foresee was improper and they would have to do a primer calculation which would take 5 to 6 weeks.

The lady pronounced that on receipt of this revised foresee we should then ring again to see what we can do to make up any shortfall.

Steve Webb: Find out how to ask the former Pensions Minister a doubt about your retirement assets in the box below

Steve Webb: Find out how to ask the former Pensions Minister a doubt about your retirement assets in the box below

Steve Webb: Find out how to ask the former Pensions Minister a doubt about your retirement assets in the box below

He pronounced they had lifted the issue about the mechanism churning out ‘incorrect forecasts’ with HMRC, but there is no warning on the foresee to contend the total aren’t or may not be correct.

Can you help bring this to your readers’ courtesy please? We could incorrectly have believed that the foresee was scold only to find on retirement that it wasn’t. Likewise we would have designed financially for an income that wouldn’t be forthcoming.

An suitable warning should be placed on all forecasts tentative the complement being rectified.

I would also advise that anyone who has perceived a foresee is created to in outcome to prominence that their foresee may be improper and to recheck their total by telephoning the DWP.

They competence need to man it with some-more staff – any call done in the last few weeks had meant a 20 minute-plus wait, which is clearly inconvenient. The staff we have oral to are very studious but must meet with a lot of complaints.


Steve Webb replies: Thank you for lifting this issue. It is indeed a source of regard if people can't rest on the information that they have been sent about their state grant to be accurate.

The problem arises, as you say, in the case of people who have been members of grant schemes that were ‘contracted out’ of the state earnings-related grant scheme.

We have dealt with the issue of constrictive out in prior columns, but in essence, this will especially impact people who were members of salary-related company grant schemes. 

In such cases, the grant scheme has done a guarantee to reinstate partial of the state grant that the worker would differently have received, and in return for this the worker and the organization compensate a revoke rate of National Insurance Contributions.

When someone who has been engaged out reaches grant age a calculation is done to revoke their state grant to take criticism of the volume that the company grant scheme has betrothed to pay.

What is the Guaranteed Minimum Pension? 

Steve Webb explained how the GMP worked and how the manners changed for people timid from open 2016 in a prior mainstay here. 

You may see phrases like ‘contracted out deduction’, ‘guaranteed smallest grant (GMP)’ or some-more recently ‘contracted out grant homogeneous (COPE)’ used to report elements of this calculation.

The problem, as you have discovered, is that the information held by HM Revenue and Customs on these deductions does not always compare up with the information held by the schemes.

Many occupational grant schemes are going by a routine of ‘reconciliation’ of their information with HMRC. When this routine began it was estimated that around 3,000 grant schemes were affected, covering around 1.5 million workers 

HMRC have set a deadline of Dec 2018 for this routine to be complete, yet there must be a risk that this deadline could slip.

This suggests that it will be another year or some-more before people can be assured that the information in their state grant matter is accurate if they were a member of this arrange of grant scheme. 

How do you get a state grant forecast? 

You can get an online foresee or ask a paper chronicle here.

The Future Pension Centre is on 0800 731 0175.

When HMRC accept updated information they have to recalculate the volume of state grant to which you are entitled.

As you were told on the telephone, your knowledge is distant from unique, and we utterly determine with you that there should be scold ‘health warnings’ so that people do not make decisions formed on dangerous information.

It is misleading how many people competence be receiving improper forecasts at this stage, but if you were engaged out during a duration before 1997 you competence be affected.

Although this information problem is gradually being sorted out, anyone wanting to know accurately where they mount as a matter of coercion should hit the DWP to safeguard that the information from their company grant scheme is now up to date. 

Best stream accounts


Former Pensions Minister Steve Webb is This Is Money’s Agony Uncle.

He is prepared to answer your questions, either you are still saving, in the routine of interlude work, or sophistry your finances in retirement.

Since leaving the Department of Work and Pensions after the May 2015 election, Steve has assimilated grant organization Royal London as executive of policy.

If you would like to ask Steve a doubt about pensions, greatfully email him at

Steve will do his best to respond to your summary in a stirring column, but he won’t be means to answer everybody or conform secretly with readers. Nothing in his replies constitutes regulated financial advice. Published questions are infrequently edited for abruptness or other reasons.

Please embody a daytime hit series with your summary – this will be kept trusted and not used for selling purposes.

If Steve is incompetent to answer your question, you can also hit The Pensions Advisory Service, a Government-backed organization which gives free help to the public. TPAS can be found here and its series is 0300 123 1047. 

Steve receives many questions about state grant forecasts and COPE – the Contracted Out Pension Equivalent. If you are essay to Steve on this topic, he responds to a standard reader doubt here. It includes links to Steve’s several progressing columns about state grant forecasts and constrictive out, which competence be helpful. 







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