Millions facing demands after pensions error

Thursday, 15 May 2003 12:00 AM

Around 10 million workers are facing demands of up to £1,500 in extra Inland Revenue contributions if they want to receive their full state pension following a computer error.

The IR's computer system failed to send out reminders to people who needed to top up their pensions for the last five years.

Reminders are supposed to be sent out automatically to anyone who falls short of the minimum £4,625 per annum income necessary to contribute a full year's National Insurance contributions. The full amount in contributions needs to be paid for at least 45 years continuously to qualify for a full state pension.

The extra National Insurance contributions will have to be paid if people want to receive their full state pension on retirement.

The Inland Revenue has now issued a warning about the error, which could affect as many as a third of all workers. Those affected will now have five years in which to pay off the shortfall.

Most people affected by the blunder are likely to be on low incomes and those close to retirement age could find their pension will be lower than expected.

The IR changed to a new computer system in 1998.

Opposition MPs are calling for an inquiry into the mix-up.

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