Anyone who relied on an older State Pension forecast should consider checking it again in 2026, particularly if they were contracted out before April 2016.
The Government has confirmed that some forecasts did not take contracted-out status into account in all cases, which meant the amount shown could be higher than the pension ultimately due.
In March 2026, Pensions Minister Torsten Bell told the Work and Pensions Committee that permanent fixes had now been introduced.
The safest approach is to obtain a current forecast, compare it with previous figures and check the National Insurance record behind it.
A difference does not automatically mean somebody has lost pension entitlement. Contracting out, missing qualifying years and the transitional rules introduced in 2016 can all legitimately produce an amount below the full new State Pension.
The full new State Pension is £241.30 a week in 2026/27, although individual entitlement can be lower or, in some transitional cases, different.
Changes to pension rates are separate from campaigns and debates about future State Pension increases, so an annual uprating should not be confused with the correction of an inaccurate personal forecast.
What Caused Incorrect State Pension Forecasts?
The main issue was connected with contracting out, which existed under the State Pension system before 6 April 2016.
Employees or pension schemes could contract out of the Additional State Pension, also known at different times as SERPS or the State Second Pension.
While contracted out, an employee generally either paid National Insurance at a lower rate or had part of their contributions directed towards workplace or private pension provision instead.
Contracting out ended on 5 April 2016 when the new State Pension system was introduced.
The forecasting problem arose because the system did not take contracted-out status into account in all cases.
As a result, some people could receive an estimate that looked as though more State Pension had been accumulated than their actual pre-2016 record supported.
This was a forecasting problem rather than a universal reduction in pensions. It is also different from other issues involving HMRC and pensioners, including cases where HMRC admitted overtaxing State Pension recipients.
How Many People Were Affected By Incorrect State Pension Forecasts?
There is no confirmed final number of individuals affected.
In 2019, the Government acknowledged significant problems with State Pension forecasts.
At the time, around 12 million forecasts had reportedly been issued and an estimated 3% could have been inaccurate, which produced an estimate of as many as 360,000 potentially incorrect forecasts.
However, this should not be treated as a confirmed total of people who lost money.
When questioned by MPs on 18 March 2026, Pensions Minister Torsten Bell said the Government could not provide an exact number because the total depended partly on how many people had actually used the affected forecast system.
Therefore, three figures need to be distinguished:
| Figure | What It Means |
| Around 12 Million | Historic number of forecasts reported as having been issued |
| Around 3% | Earlier estimate of forecasts potentially containing inaccuracies |
| Up To 360,000 | Historic estimate based on applying 3% to roughly 12 million forecasts |
These figures do not prove that 360,000 people received the wrong pension payment.
Has The State Pension Forecast Error Been Fixed In 2026?
The Government says permanent fixes have now been introduced.
During evidence to the Work and Pensions Committee in March 2026, Torsten Bell said the forecasting system previously did not account for contracting-out status in all cases. He said permanent changes were now in place so forecasts take that status into account.
That does not make an old forecast retrospectively reliable. Someone who made retirement decisions based on a previous figure should still obtain a current forecast and compare the two.
Who Is Most Likely To Have Received A Wrong State Pension Forecast?
The error does not mean every person with a pre-2016 National Insurance record received a wrong forecast. Certain employment and pension histories make the issue more relevant.
People Contracted Out Before April 2016
Anyone who was contracted out of the Additional State Pension is an obvious group to check.
Contracting out was common among workers enrolled in occupational pension schemes. An individual could therefore have a long employment history and many qualifying years while still having a State Pension calculation affected by contracted-out service.
Members Of Final Salary Or Defined Benefit Pension Schemes
Defined benefit and final salary scheme members were commonly contracted out.
This included many employees working in:
- Local Government
- The NHS
- Teaching
- The Civil Service
- Police And Fire Services
- Utilities
- Banks And Insurers
- Large Industrial Employers
GOV.UK states that members of defined benefit schemes were likely to have been contracted out of the Additional State Pension.
For people still employed by councils, current earnings developments such as the local government pay rise for 2026/27 affect present-day pay, while earlier pension scheme membership can separately affect how the State Pension calculation is built.
People With Several Previous Employers
A complicated employment history can make records more difficult to reconcile.
Potential warning signs include:
- Several Employers Before 2016
- Employment With Different Pension Schemes
- Periods Of Self-Employment
- Missing Employment Records
- Changes Between Contracted-Out And Non-Contracted-Out Employment
People Who Transferred Or Lost Track Of Old Pensions
Pension transfers can make it harder for an individual to identify where contracted-out pension rights eventually ended up.
Someone who cannot find an old provider can use the Government’s Pension Tracing Service to identify contact details. GOV.UK specifically recommends this where contact with a previous pension provider has been lost.
People Who Relied On Older State Pension Forecasts
Anyone who based retirement planning on a forecast issued before the permanent correction should consider checking the figure again.
Particular attention is sensible where an old forecast showed an entitlement close to the full State Pension despite a lengthy history in contracted-out workplace pension schemes.
How Can You Tell If You Were Contracted Out?
One of the simplest checks is to find old payslips from before 6 April 2016.
GOV.UK states that a worker was contracted out where an old payslip shows one of these National Insurance category letters:
- D
- E
- L
- N
- O
People can also ask former employers or pension providers to confirm whether a workplace pension was contracted out.
| Check | What To Look For |
| Old Payslips | NI category D, E, L, N or O |
| Pension Statements | References to contracted-out service |
| Previous Employer | Confirmation of the pension arrangement |
| Pension Provider | Dates of contracted-out membership |
| Missing Pension | Pension Tracing Service details |
Does A Lower State Pension Forecast Always Mean It Is Incorrect?
No. A forecast below the full £241.30 weekly new State Pension is not automatically wrong.
The amount somebody receives can legitimately be lower because of:
- Contracting Out Before 2016
- Insufficient National Insurance Qualifying Years
- Gaps In The National Insurance Record
- Transitional Rules Applying To Pre-2016 Contributions
- Time Remaining Before State Pension Age
GOV.UK specifically states that someone contracted out before 6 April 2016 may not receive the full new State Pension.
The effect depends partly on earnings and how long the person was contracted out.
It is also useful to distinguish pension entitlement from the wider question of whether the State Pension is classed as a benefit.
The amount is primarily determined by a person’s National Insurance history rather than simply being a flat payment automatically given to everyone reaching State Pension age.
How Did Contracting Out Affect The New State Pension Calculation?
People who already had a National Insurance record when the new State Pension began on 6 April 2016 were brought into the system using transitional calculations.
Contracted-out service was taken into account when establishing their starting amount.
This is why simply counting qualifying years is not always enough to reproduce an individual’s pension figure.
What Is A Contracted-Out Adjustment?
A contracted-out adjustment reflects pension rights that were built elsewhere while a person was paying reduced National Insurance or directing contributions into another pension arrangement.
The intention was not simply to remove retirement income.
During those years, the employee would generally have been building replacement pension rights through a workplace or personal pension.
What Does COPE Mean?
COPE means Contracted Out Pension Equivalent.
It is an estimate intended to indicate the value associated with periods during which someone was contracted out.
COPE should not be treated as:
- A Bill Owed To HMRC
- A Separate State Pension Charge
- A Guaranteed Separate Pension Payment
- An Exact Pound-For-Pound Deduction From The Current Forecast
The actual State Pension calculation depends on the person’s complete record.
What Does GMP Mean?
GMP means Guaranteed Minimum Pension.
It mainly relates to people who were members of contracted-out salary-related schemes between 1978 and 1997.
Those schemes were required to provide at least a specified minimum pension relating to contracted-out service.
The House of Commons Library confirms that this requirement applied to contracted-out defined benefit schemes during that period.
GMP and COPE are therefore connected to contracting out, but they are not the same thing.
Why Do 35 Qualifying Years Not Always Guarantee The Full State Pension?
The widely repeated idea that everyone needs exactly 35 years for a full new State Pension can be misleading for people whose National Insurance history began before April 2016.
Pre-2016 records can be subject to transitional calculations, including adjustments for contracted-out service.
A person can therefore have 35 or more qualifying years and still initially have an amount below the full new State Pension.
How Much Can Contracting Out Reduce A State Pension Forecast?
There is no universal contracted-out deduction.
GOV.UK currently gives examples demonstrating how different the outcome can be.
One example shows a person whose contracted-out history reduced their estimated pension to £200 a week.
Another shows an individual with a forecast of £170 a week after contracting out.
The official examples also show why future qualifying years matter.
| Example | Estimated Weekly Pension | Potential Position |
| Full 2026/27 New State Pension | £241.30 | Maximum Full Rate |
| GOV.UK Example 1 | £200 | Further Qualifying Years May Increase It |
| GOV.UK Example 2 | £170 | Further Years May Increase It But May Not Reach Full Rate |
For the 2026/27 year, each qualifying year added after April 2016 can increase the new State Pension by approximately £6.89 a week, up to the applicable maximum, although individual circumstances still matter.
Contracting out can reduce a State Pension forecast below the full rate, with the final amount depending on an individual’s National Insurance and pension history.
How Can You Check Whether Your State Pension Forecast Was Wrong?
A comparison should look beyond the headline weekly figure.
- Get A Current Forecast: Obtain a fresh State Pension forecast using the official online service or another available DWP route.
- Keep A Copy Of The New Figure: Record the date and weekly amount so it can be compared with earlier statements.
- Find Previous Forecasts: Look for paper statements, downloaded forecasts, emails or retirement-planning documents showing the older figure.
- Compare The Figures: Check the projected weekly payment, qualifying years, maximum available amount and any gaps.
- Check Your National Insurance Record: Look for missing employment, incomplete years or credits that should have been recorded.
- Check Whether You Were Contracted Out: Old payslips and pension records can help confirm this.
- Contact Previous Pension Schemes; Ask whether the scheme was contracted out and whether pension rights were transferred elsewhere.
- Ask For An Explanation If The Difference Is Significant: A written explanation can be particularly useful where the earlier figure influenced retirement decisions.
Is A State Pension Forecast Guaranteed?
No. A State Pension forecast is an estimate, not a binding promise that a particular amount will definitely be paid.
The official BR19 forecast application explains that forecasts are based on current law, while the online forecast service uses the person’s National Insurance record to estimate what they could receive.
It helps to distinguish three different records:
| Record | Purpose |
| State Pension Forecast | Estimates future State Pension entitlement |
| National Insurance Record | Shows qualifying contributions and credits |
| State Pension Award | Confirms entitlement when the pension is claimed |
A forecast can therefore change when records are corrected or further qualifying years are added.
Can Missing National Insurance Years Increase Your State Pension?
Sometimes.
The full new State Pension is £241.30 a week in 2026/27.
For relevant post-2016 years, an additional full qualifying year can add about £6.89 a week, provided the person has not already reached the maximum available to them.
However, someone should not automatically pay voluntary National Insurance simply because a year is marked incomplete.
A contribution might not improve the pension where:
- The Maximum Entitlement Has Already Been Reached
- Future Employment Will Provide Enough Qualifying Years
- A Free National Insurance Credit Should Apply
- The Particular Year Does Not Improve The Transitional Calculation
- Another Missing Year Would Be More Valuable
Importantly, GOV.UK states that years in which somebody was contracted out still count as qualifying years and are not themselves gaps in the National Insurance record.
What If A Wrong Forecast Stopped You Buying Missing NI Years?
Someone who relied on an inaccurate forecast may have believed there was no reason to pay voluntary National Insurance.
This became especially important after the temporary opportunity to fill much older NI gaps ended on 5 April 2025.
However, people who believe an incorrect forecast affected their decision should not automatically assume that nothing can be done.
In March 2026, the Pensions Minister told MPs that people who think they were affected can contact HMRC and that HMRC can take the circumstances into account in enabling them to buy missing State Pension years.
Useful evidence to retain includes:
- The Old Forecast
- The Current Forecast
- National Insurance Records
- Correspondence With HMRC Or DWP
- Records Showing Why Contributions Were Not Purchased
- Pension Or Financial Advice Based On The Old Figure
The key question is whether paying for the missing year would actually improve entitlement.
Can You Claim Compensation For An Incorrect State Pension Forecast?
Compensation should not be assumed simply because an old forecast was higher than a newer one.
A forecast is different from a formal pension award. Someone may still receive the pension to which the legislation entitles them even where earlier information was inaccurate.
A stronger case for redress could arise where the person can demonstrate actual financial consequences from relying on incorrect official information.
Evidence might include:
- Early Retirement Based On The Forecast
- Loss Of Employment Income
- Additional Withdrawals From Private Pensions
- Missed National Insurance Contributions
- Additional Borrowing
- Changes To Housing Or Investment Decisions
- Professional Advice Based On The Incorrect Figure
The distinction between a pension shortfall and tax is also important.
Someone replacing lost expected State Pension with larger private pension withdrawals may face additional tax exposure, an issue connected with the wider rising retiree tax burden as frozen thresholds bring more retirement income into taxation.
What Should You Do If You Retired Early Because Of An Incorrect Forecast?
An overstated forecast can be particularly serious where someone stopped working because they believed their retirement income was secure.
The immediate priority should be to establish the correct position rather than assuming the old or new figure is automatically right.
A person in this situation should:
- Obtain A Current State Pension Forecast
- Request An Explanation For Any Major Difference
- Check The National Insurance Record
- Confirm Contracted-Out Pension Rights
- Check Whether Missing Years Can Still Increase Entitlement
- Review Workplace And Private Pension Income
- Calculate The Annual Income Shortfall
- Keep Evidence Of Decisions Made Using The Old Forecast
- Check Pension Credit And Other Support If Household Income Is Low
For example, a £30 weekly difference equals around £1,560 a year before considering future pension increases.
A discrepancy of that size can materially alter how quickly private pension savings are used.
People increasing private pension withdrawals to cover a shortfall should also consider the tax consequences rather than simply replacing the missing income pound for pound.
Frequently Asked Questions
Can A State Pension Forecast Be Wrong?
Yes. State Pension forecasts depend on the information and calculation used at the time. The Government has confirmed that some historic forecasts did not correctly reflect contracted-out status in all cases.
Has The State Pension Forecast Problem Been Fixed In 2026?
The Government says permanent fixes are now in place so forecasts take contracted-out status into account. Anyone relying on an older forecast should still obtain a current figure for comparison.
How Do I Know If I Was Contracted Out?
Check payslips dated before 6 April 2016. GOV.UK says NI category letters D, E, L, N or O indicate contracted-out employment. A former employer or pension provider can also confirm the position.
Does 35 Years Of National Insurance Guarantee A Full State Pension?
Not for everyone. People with National Insurance records from before April 2016 can be affected by transitional and contracted-out calculations, so 35 qualifying years do not automatically guarantee the full rate.
Why Is My New Forecast Lower Than My Old Forecast?
The difference could arise from a correction to contracted-out information, changes to the NI record or other calculation updates. Compare both forecasts and the underlying National Insurance record before assuming an error has occurred.
Can I Buy Missing NI Years If An Incorrect Forecast Misled Me?
Potentially. The Pensions Minister said in March 2026 that affected people can contact HMRC and that their circumstances can be taken into account when considering missing years.
Can I Claim Compensation For An Incorrect State Pension Forecast?
Possibly, depending on the circumstances, but compensation is not automatic. Evidence that the incorrect information caused identifiable financial loss or influenced an irreversible retirement decision would be particularly important.