Incorrect State Pension forecasts may have caused hundreds of thousands of people to overestimate their retirement income.
The problem mainly affected people who had previously been contracted out of the Additional State Pension and used the online forecast service before it was fully corrected in February 2026.
Some forecasts failed to account properly for contracted-out years, potentially displaying a higher pension than the person was likely to receive. The difference was not always small.
In one widely reported case, a forecast of £185.15 a week was followed by an actual entitlement of £148.25—an annual shortfall of approximately £1,919.
Anyone with workplace pension membership before April 2016 should obtain a new forecast, compare it with earlier statements and check that their National Insurance and contracted-out records are complete.
What Caused the Incorrect State Pension Forecasts?
The forecast problem was connected to contracting out, an arrangement that existed before the new State Pension was introduced on 6 April 2016.
Under the former system, employees could be contracted out of the Additional State Pension through certain workplace or personal pension arrangements.
They or their employers generally paid lower National Insurance contributions, while their pension scheme took responsibility for providing replacement pension benefits.
The online service was supposed to reflect this history when estimating future State Pension entitlement. However, some forecasts did not apply the contracted-out adjustment correctly.
As a result, a person could have been shown a figure suggesting that they were on course for the full pension even though their pre-2016 starting amount was lower.
The confirmed problem concerned forecasts rather than a general reduction applied to every pensioner. It should also not be confused with separate historic State Pension underpayment or pension taxation errors.
What Do COPE and GMP Mean?
Two terms commonly arise when contracted-out pension records are reviewed: COPE and GMP. They are connected, but they do not mean the same thing.
Contracted Out Pension Equivalent
COPE stands for Contracted Out Pension Equivalent. It is an estimate of the pension value associated with periods when an individual was contracted out of the Additional State Pension.
It is intended to indicate that part of the person’s workplace or private pension may replace State Pension rights that would otherwise have been built up.
COPE is not:
- A separate bill that must be paid to HMRC
- Necessarily the exact amount by which the final State Pension will be reduced
- An additional payment guaranteed to arrive separately
- Always identifiable as a distinct amount within a workplace pension payment
The official transitional State Pension calculation uses a contracted-out or rebate-derived adjustment. The COPE figure helps explain its broad effect, but the final calculation depends on the individual’s complete record.
Guaranteed Minimum Pension
A Guaranteed Minimum Pension, or GMP, relates mainly to salary-related pension schemes that were contracted out between April 1978 and April 1997.
Those schemes had to provide members with at least a specified minimum level of pension for their contracted-out service. HMRC and pension schemes have carried out extensive GMP reconciliation work to compare the contracted-out data held on government and scheme records.
A mismatch can occur if:
- HMRC and the pension scheme hold different contracted-out dates
- Earnings information is missing or incorrect
- A pension transfer was not recorded properly
- A previous employer or scheme changed administrator
- Reduced-rate National Insurance information is incomplete
- The GMP recorded by a scheme differs from the government calculation
COPE is therefore a broader estimate connected to contracting out, while GMP is a specific pension promise arising from certain contracted-out defined benefit service.
How Was a Pre-2016 State Pension Starting Amount Calculated?
When the new State Pension began in April 2016, people with an existing National Insurance record were given a starting amount.
Broadly, two calculations were performed:
- The amount built under the old State Pension rules, including the basic and Additional State Pension and any contracted-out adjustment.
- The amount that would have been built under the new State Pension formula up to April 2016, after allowing for contracted-out history.
The higher result normally became the person’s starting amount. Additional qualifying years accumulated after April 2016 could then increase it, subject to the maximum new State Pension.
This is why the frequently repeated statement that 35 qualifying years always produces a full pension is misleading. It is broadly relevant to someone whose National Insurance record began after April 2016, but transitional rules apply to older records.
What Might a Contracted-Out Adjustment Look Like?
Consider a hypothetical employee with 35 qualifying years by April 2016.
Without considering contracting out, an initial calculation might suggest an amount equivalent to £190 a week. Suppose the contracted-out calculation produces an adjustment of £32 a week.
The simplified result would look like this:
| Calculation | Weekly amount |
| Amount before contracted-out adjustment | £190 |
| Illustrative contracted-out adjustment | £32 |
| Illustrative starting amount | £158 |
The £32 should not automatically be treated as lost retirement income. The employee may have acquired replacement rights in a workplace or personal pension while contracted out.
The individual might also build more qualifying years after April 2016. Those later years could increase the State Pension until the applicable maximum is reached.
The actual calculation cannot safely be reproduced using contracted-out years alone because earnings, scheme type, contribution history and transitional protections may all matter.
How Much Could an Incorrect Forecast Cost?
A widely reported case involved a woman who had worked for almost 40 years and retired at 58 after receiving an official forecast showing £185.15 a week. Her eventual entitlement was reported as £148.25 a week.
| Figure | Amount |
| Earlier forecast | £185.15 a week |
| Actual entitlement | £148.25 a week |
| Weekly difference | £36.90 |
| Approximate annual difference | £1,918.80 |
| Approximate difference over ten years, before increases | £19,188 |
This example shows why even a seemingly modest weekly discrepancy can materially affect retirement planning.
Someone expecting £185.15 a week might have decided that savings could cover the remaining household costs. A shortfall of nearly £2,000 a year could instead require a return to employment, greater pension withdrawals or substantial spending reductions.
What Is the Full Timeline of the Forecast Error?
The problem did not move directly from the service’s launch in 2016 to its final correction in 2026. Several important events occurred in between.
| Date | Development |
| February 2016 | The online State Pension forecast service was launched shortly before the new system began |
| April 2016 | Contracting out ended and the new State Pension was introduced |
| 2017 | Officials were alerted to problems affecting contracted-out forecasts |
| 2019 | Approximately 360,000 potentially incorrect estimates had reportedly been issued during the service’s first three years |
| 2021 | Changes improved the treatment of contracted-out histories for some people approaching pension age |
| 2021–2026 | The partial correction did not resolve forecasts for every affected future retiree, particularly those reaching State Pension age after April 2029 |
| 13 February 2026 | HMRC completed a further update intended to include contracted-out years correctly for the remaining group |
The delay attracted criticism from pensions specialists. Independent pensions commentator Tom McPhail described the length of time taken to resolve the problem as impossible to justify.
Who Is Most Likely to Have Received an Incorrect Forecast?
The problem does not affect everyone with a State Pension forecast. The risk is greater for people with a pre-2016 employment or pension history.
Members of Final Salary Pension Schemes
People who belonged to a defined benefit or final salary workplace scheme before April 2016 may have been contracted out automatically. This includes many former public-sector and large private-sector employees.
Potentially relevant schemes include those connected with:
- Local government
- Teaching
- The NHS
- The Civil Service
- Police or fire services
- Large manufacturing employers
- Utilities and former nationalised industries
- Major banks and insurance companies
Membership alone does not prove that a forecast was wrong, but it is a reason to check the contracted-out record.
Members of Contracted-Out Personal or Money Purchase Pensions
Contracting out was not limited to final salary schemes. Some people used an appropriate personal pension or contracted-out money purchase arrangement.
These records can be harder to recognise, particularly if the pension has since been transferred, consolidated or renamed.
Married Women Who Paid Reduced-Rate National Insurance
Some married women and widows elected to pay reduced-rate National Insurance contributions under the former married woman’s reduced-rate election, often called the married woman’s stamp.
This is distinct from contracting out, but it can affect the number and type of qualifying years shown. Anyone with this history should check that their forecast reflects the correct contribution rules rather than assuming every year in employment was a full qualifying year.
People With Several Previous Employers or Pension Transfers
The risk of a record mismatch may be higher where a person:
- Worked for several contracted-out employers
- Transferred a pension between schemes
- Had an employer that closed or was taken over
- Cannot identify an old pension provider
- Has different employment dates across HMRC and scheme records
People Who Relied on a Forecast Issued Before February 2026
An old forecast deserves particular scrutiny if it showed the full amount despite an extensive contracted-out history. A new forecast should be obtained rather than assuming that the earlier figure remains valid.
How Can Someone Check Whether a Forecast Was Wrong?
A structured comparison is more useful than looking only at the headline weekly amount.
1. Obtain a New Forecast
The individual should request a current State Pension forecast. The online service is normally quickest, although a BR19 postal forecast or assistance from the Future Pension Centre may also be available.
2. Save the Current Figure
The forecast should be downloaded, printed or saved with the date clearly visible. Online figures can change when records are corrected or another qualifying year is added.
3. Compare It With Previous Statements
The individual should compare:
- The weekly amount at State Pension age
- The maximum amount that could be reached
- The number of qualifying years
- Any incomplete years
- Contracted-out information
- Whether further contributions can improve the pension
4. Check the National Insurance Record
A State Pension forecast and a National Insurance record are related but not identical. The record should be checked for missing employment, credits, self-employment contributions and years incorrectly marked as incomplete.
5. Contact Old Pension Schemes
Former schemes may be able to confirm:
- Whether the person was contracted out
- The applicable dates
- Whether GMP was built up
- Whether the pension was transferred
- Which administrator now holds the records
6. Ask for a Written Explanation
If the old and new figures differ materially, the person should ask HMRC or the Department for Work and Pensions to explain the calculation in writing. Written records are important if compensation or a formal complaint is later pursued.
Incorrect State Pension Forecast Shortfall Calculator
A useful on-page calculator should measure the financial effect of a forecast change without pretending to reproduce HMRC’s full COPE calculation.
Suggested Calculator Inputs
- Previous forecast per week
- Corrected forecast per week
- Expected years in retirement
- Optional annual pension increase
- Voluntary contribution cost
- Expected weekly increase from the contribution
Core Calculations
Weekly shortfall
Previous weekly forecast minus corrected weekly forecast
Annual shortfall
Weekly shortfall multiplied by 52
Simple lifetime shortfall
Annual shortfall multiplied by expected years in retirement
Top-up break-even period
Cost of voluntary contribution divided by the annual pension increase it produces
Example Result
If the old forecast was £185.15 and the corrected figure is £148.25:
- Weekly shortfall: £36.90
- Monthly average shortfall: £159.90
- Annual shortfall: £1,918.80
- Ten-year shortfall before annual increases: £19,188
- Twenty-year shortfall before annual increases: £38,376
The calculator should clearly state that it is an illustration. It cannot calculate an official COPE, GMP or State Pension award because it does not have access to government or pension scheme records.
Can Missing National Insurance Years Correct the Shortfall?
Sometimes, but not always.
For 2026/27, the full new State Pension is £241.30 a week. A simple division by 35 gives approximately £6.89 a week for one qualifying year. However, that calculation should not be treated as a guaranteed increase for someone covered by transitional rules.
A missing year may fail to increase the pension if:
- The person has already reached the maximum
- The year falls before 2016 and does not improve the starting amount
- Contracted-out history changes the calculation
- Another year would be more beneficial
- The record should receive a free National Insurance credit instead
- The person is likely to build enough future qualifying years through work
For a comparison with current pension levels, the article on the £610 State Pension petition explains how the campaign figure differs from the actual 2026/27 full new State Pension.
What Happened to the Extended NI Top-Up Deadline?
The temporary transitional deadline allowed eligible people to fill certain National Insurance gaps going back as far as April 2006.
The deadline was originally due to expire in April 2023. After heavy demand and concerns that people could not obtain advice in time, it was ultimately extended to 5 April 2025.
During that window, eligible individuals could potentially correct gaps covering tax years from 2006/07 to 2017/18.
That special deadline has now passed. Under the normal rules, most people can generally pay voluntary contributions for only the previous six tax years, with each year having its own deadline.
However, someone who missed the extended opportunity because of an incorrect official forecast should raise that fact directly with HMRC. The person should not assume that an older year can still be purchased, but should ask whether a special remedy or backdated contribution rate applies.
Can Affected People Claim Compensation?
Compensation is not automatic simply because an old forecast changed. A claimant would normally need to show financial loss, unreasonable delay, serious inconvenience or detrimental reliance on incorrect official information.
Useful evidence may include:
- Copies of the incorrect and corrected forecasts
- Retirement or resignation dates
- Correspondence with HMRC or DWP
- Pension scheme statements
- Financial advice based on the old forecast
- Evidence of voluntary contributions that were not made
- Proof of early access to savings or private pensions
- Housing, employment or investment decisions linked to the forecast
- Additional costs caused by the shortfall
HMRC has indicated that compensation may be considered where appropriate. It has also referred to the possibility of allowing verified affected people to make contributions at an earlier applicable rate.
The outcome will depend on the facts. An incorrect forecast does not necessarily mean the individual is legally entitled to receive the overstated pension for life.
How Should Someone Complain?
The complaint should be directed to the organisation responsible for the disputed action.
- HMRC generally handles National Insurance records and voluntary contributions.
- DWP and the Pension Service generally handle State Pension forecasts, awards and payments.
- A workplace pension scheme handles its own membership, transfer and GMP records.
The complaint should identify the incorrect information, when it was received, the action taken in reliance on it and the requested remedy.
If the departmental complaints process does not resolve the matter, escalation may include the relevant independent complaints reviewer, such as the Adjudicator’s Office for an HMRC complaint or the Independent Case Examiner for a DWP service complaint.
A complaint about unresolved government maladministration may ultimately be referred to the Parliamentary and Health Service Ombudsman through an MP. This route normally requires the department’s complaints procedure to have been completed first.
The Pensions Ombudsman is more likely to be relevant where the dispute concerns the administration of an occupational or personal pension scheme rather than HMRC’s online State Pension forecast.
What If Someone Retired Early Because of a Wrong Forecast?
A person who left employment or used savings after relying on an overstated forecast should act even if the decision cannot now be reversed.
Immediate steps may include:
- Obtaining the corrected forecast and a written calculation.
- Recording how the old figure influenced the retirement decision.
- Checking whether further NI contributions can still increase entitlement.
- Reviewing workplace and private pension options.
- Checking eligibility for Pension Credit.
- Checking Council Tax support, Housing Benefit where applicable and help with health costs.
- Reviewing withdrawals from private pensions to avoid exhausting savings too quickly.
- Submitting a formal complaint if a measurable loss arose from official misinformation.
Pension Credit is means-tested and uses household circumstances, so a lower State Pension does not automatically create entitlement. Nevertheless, it should be checked where retirement income is below the applicable minimum.
Tax should also be considered when private pension withdrawals are increased to replace a State Pension shortfall. The analysis of State Pension tax concerns and frozen thresholds explains why additional retirement income can affect the amount ultimately retained.
Frequently Asked Questions
Can a State Pension forecast be incorrect?
Yes. A forecast is an estimate based on the information available at the time. Missing NI contributions, incorrect credits, contracted-out records and system errors can all produce an inaccurate figure.
Has the contracted-out forecast problem been fixed?
HMRC completed a further update on 13 February 2026. People with an older forecast should obtain a new one, particularly if they were contracted out before April 2016.
Does a COPE figure come off the State Pension pound for pound?
Not necessarily. COPE is an estimate of pension value connected with contracted-out service. The official transitional calculation is more complex, and the COPE figure should not be treated as a simple standalone deduction.
Is COPE the same as GMP?
No. COPE is a broad estimate associated with contracted-out pension rights. GMP is a specific minimum pension that certain contracted-out salary-related schemes had to provide for service between April 1978 and April 1997.
Do 35 qualifying years guarantee the full State Pension?
Not for everyone. People whose National Insurance record began before April 2016 can be subject to transitional and contracted-out calculations and may need more than 35 years to reach the full rate.
Can an individual demand the amount shown on an old forecast?
Usually not. A forecast is not the same as a formal pension award. However, compensation or another remedy may be considered where incorrect information caused proven financial loss.