Miss G’s complaint about The Pension Service
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Miss G’s case illustrates how far-reaching the effects of misleading information can be. As a result of a computer problem, The Pension Service misled Miss G about her future pension entitlement. They then gave her misleading information about what they would do to put it right, compounding their original error. In the end, it was not possible for them to ‘turn back the clock’ for Miss G.
Background to the complaint
In June 2002 Miss G received a state pension forecast which said she had earned a pension of £131.73 a week up to April 2001 (including £75.50 basic state pension and £52.18 additional pension). On the basis of those figures Miss G calculated that she could live on a redundancy payment and a small pension from her current employer until retirement age, and would have sufficient income to live on after that from the further income due to her from her previous employer’s pension and the state pension. Miss G took voluntary redundancy at the end of June. In October 2004 Miss G obtained a state pension forecast which said that she had earned a pension of £143.73 a week up to April 2003 (including £79.60 basic state pension and £59.89 additional pension).
In March 2006 Miss G obtained a further pension forecast which said that she had earned a pension of £130.47 a week up to April 2005 (consisting of £82.05 basic state pension and £44.05 additional pension). Miss G said that she was ‘shocked and distressed at the huge decrease in the figures quoted’ and telephoned The Pension Service, in early April, to query this. After a number of calls Miss G spoke to Officer E, to whom she wrote subsequently to confirm the details of the call. Miss G’s letter explained that The Pension Service’s records showed her incorrectly as having been contracted-out of the additional state pension on three occasions, when it should have been two occasions.
In May 2006 Miss G telephoned The Pension Service to follow up her earlier letter, and spoke to Officer F. Miss G said that she had regular contact with Officer F who advised her that the 2002 and 2004 forecasts were accurate but that, even if they were not, The Pension Service would pay the 2004 forecast amounts with increases to date. The Pension Service’s records contain only one record of contact between Miss G and Officer F (in July 2006) which makes no reference to honouring earlier forecasts. Officer F did, however, seek advice from a specialist team.
In July 2006 The Pension Service sent Miss G a pension forecast of £133.01 a week (including £84.25 basic state pension and £44.27 additional pension). Miss G wrote to Officer H (the manager of the Future Pension Centre) and said that Officer F had told her to ignore the forecast she had just received because it was incorrect, and repeated Officer F’s previous assurances about honouring the earlier forecast. Later in July Officer F telephoned Miss G and said that the forecast sent to her (with the £44.27 additional pension) was correct. Officer F later said he could not recall the details of his conversations with Miss G but was sure he would not have indicated that an incorrect forecast would be honoured.
Also in July 2006 The Pension Service found Miss G’s (unanswered) letter of April 2006 and asked her for information so that they could consider financial redress. Officer J (a customer services officer) then telephoned Miss G, who referred to the earlier assurances she said that Officer F had given her. Officer J said that the matter would be fully looked into, but it might take some time. Miss G then sent The Pension Service a copy of her letter to Officer H (which had not been replied to) and the following day provided details to enable them to consider financial redress. She said she would not have stopped working in 2002 had she received a correct forecast and asked for Officer F’s assurances to be honoured.
In late July 2006 Miss G wrote to tell The Pension Service that she was concerned their records showed her incorrectly as not contracted-out from 1999-2002 and asked if contributions from the early 1990s had been omitted from her 2006 forecast. In August 2006 Officer J told Miss G that being contracted-out did not affect her additional pension and apologised for giving the impression that their records did not show she was contracted-out in 1999-2002. Miss G raised again the assurances given by Officer F. Officer J told Miss G that neither senior staff nor Officer F had authority to honour the earlier forecasts.
Miss G sent a letter of complaint to The Pension Service. Later in August 2006, an officer from The Pension Service visited Miss G to take a statement about her complaint. During that meeting Miss G disagreed with The Pension Service’s account of events (including that Officer F had told her that the July 2006 forecast was correct). Miss G then put her complaint to her MP. She said that Officer J had confirmed that Officer F had acknowledged that she would receive a pension in line with the 2004 forecast. Officer J later said that she did not recall telling Miss G that Officer F had confirmed that version of events to her. The MP then wrote to the Chief Executive of The Pension Service.
In September 2006 The Pension Service completed their investigation of Miss G’s pension forecasts, and awarded her compensation of £100 by way of apology for the inconvenience their errors had caused her, and £10 towards her communication costs. The awards were made on the basis that the 2002 and 2004 forecasts had applied information incorrectly (the wrong category of National Insurance contributions had been used to calculate additional state pension), with the result that the additional state pension figure was too high. The Pension Service also apologised to Miss G, but said they could not pay redress for financial disappointment (her claim that she would not have accepted voluntary redundancy was considered to be a hypothetical loss rather than evidenced financial loss).
In October 2006 The Pension Service’s Chief Executive wrote to the MP apologising for the mistake and offering an explanation. She said that they were investigating whether other customers’ records were affected by the error, and that they could not pay Miss G’s pension at a higher rate, and (apparently unaware of the September 2006 decision) that they would consider compensation. Miss G remained unhappy, and declined to cash the cheque for the compensation payment (lest this imply that she accepted the lower pension entitlement), and the MP then wrote to the Minister for Pensions Reform. That letter was passed to The Pension Service’s Chief Executive, who replied in November, offering further apologies and explanations. She also said that pension forecasts were only an estimate and should not be taken as a formal decision of entitlement. She also said that they could not confirm the content of the calls between Miss G and Officer F, but the information he was alleged to have given was incorrect. In January 2007 Miss G complained to the Ombudsman.
What we investigated
We investigated Miss G’s complaint that The Pension Service had twice sent her incorrect pension forecasts, and that they had given her confusing and contradictory information.
Miss G said that, if she had known her true position, she would not have taken voluntary redundancy in 2002; or had the matter been put right in 2004 she would have taken a job again then; and she would have made additional savings intended either to increase her retirement income or to increase the capital she had saved when she did retire.
What our investigation found
We found that the 2002 and 2004 pension forecasts misdirected Miss G about her likely entitlement to state pension and that amounted to maladministration. There was no evidence that The Pension Service had rigorously looked into the matter to identify, in a methodical way, the extent of the problem, and what they could do to help others who might have been similarly misled. In the light of the Chief Executive’s undertaking to the MP in October 2006 and with particular reference to two of the Principles of Good Administration (‘Getting it right’ and ‘Putting things right’) we found that this lack of action amounted to maladministration.
We found that The Pension Service took almost four months to give Miss G an adequate initial response to her enquiries about her pension forecasts. Officer F set out to deal with her helpfully but failed to keep adequate records of his conversations with her, and took too long to recognise her query as a complaint. The Pension Service failed to apply their complaints procedures and timescales, were confused about how they might respond and, when they did provide a full response, failed to marry up the Chief Executive’s letter with the compensation decision. Taken together, these errors and omissions amounted to maladministration: Miss G was justified in saying that she had received confusing and contradictory information.
As a result of maladministration, Miss G was understandably outraged by the fact that she had received two incorrect forecasts, and was shocked and disappointed to discover that her entitlement was less than she had been led to believe. Trying to work out how to accommodate this change of circumstances caused Miss G great worry, and she was robbed of the opportunity to plan properly for her retirement. By the time the errors emerged, she was not in a position to make good that lost opportunity. Miss G also suffered stress and inconvenience through The Pension Service’s failure to keep to their timescales and guidance when handling her complaint and their failure to co-ordinate their final response.
We concluded our investigation in August 2008 and upheld Miss G’s complaint.
Outcome
As a result of our recommendations, The Pension Service agreed to:
- apologise to Miss G for sending her inaccurate pension forecasts, and for their poor complaint handling;
- pay her £5,000 to recognise the loss of opportunity to plan properly for her future and for the inconvenience and stress caused by their poor complaint handling; and
- establish who else might have been affected by the same error and, as far as is possible, put that right by:
writing to these people warning them about the inaccuracy of past forecasts;
providing them with updated and correct forecasts; and
considering an appropriate remedy for anyone who has suffered in a similar way to Miss G.
