State Pension: poor Government record-keeping could hit thousands of workers

Some government computer systems from the 80s and 90s were not talking to each other properly. Because of this, up to 50,000 people, mostly women, might end up getting less money when they retire, even if they deserve more.

Who’s Raising the Alarm? Steve Webb, who used to be the Pensions Minister, is warning about this.

Why does it matter? When you retire in the UK, you get some money from the government, called the State Pension. How much you get depends on how much you’ve worked throughout your life. Basically, for every year you work and pay National Insurance (think of this as a yearly ‘ticket’ to get your retirement money), you earn a chunk of the State Pension.

A Helpful Change in the Past: In 1978, the government realised that if you stopped working to take care of kids, you shouldn’t miss out. So, they made a rule: if you stayed home to look after kids and got child benefit (money the government gives to parents), your yearly ‘ticket’ was saved, as if you were working. This old system was given a new look in 2010, but the idea stayed the same.

The Big Problem: Imagine you’re baking and you have two recipe books. One tells you the ingredients and the other one the steps. You’re supposed to use both together. But, what if you sometimes forgot to check the second book? You’d mess up the cake, right? This is what happened with the government’s records. One ‘book’ (computer system) had info about child benefits and the other had National Insurance records. And, well, they didn’t always get the recipe right.

The Impact: If you were supposed to get a full State Pension of £155.65 a week because of 35 yearly ‘tickets’, and the mistake meant you missed 4 ‘tickets’, you would get £17.79 less every week. Over 20 years of retirement, that’s a loss of £18,501.60! If lots of people face this problem, they together might miss out on a whopping £500 million.

What Should You Do? If you were at home looking after kids in the 80s or 90s, it’s like checking if you’ve left any cash in an old coat pocket. You should check online to make sure the government knows about all your ‘tickets’. This way, when it’s time to retire, you get every penny you’re owed.