Overview
- The Work and Pensions Committee published a report on Saturday urging compensation after finding the DWP’s online state pension calculator had given inflated forecasts for nearly a decade.
- The tool failed to apply historical 'contracting out' adjustments, which for some users overstated expected payments by as much as about £100 a week.
- DWP says it has fixed the online calculator for all users and will respond to the committee’s recommendations, while MPs are pressing for payouts covering as many as 800,000 people.
- Chancellor Rachel Reeves has pledged to exempt people whose only income is the state pension from the impending tax charge, but HMRC says primary legislation is needed and eligibility details remain unclear.
- The row comes as rising state pension levels and the politically popular triple lock push many full-pension claimants up to the frozen personal allowance and add long-term fiscal pressure that the OBR estimates could cost about £15.5bn a year by 2029–30.