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admits millions were kept in the dark over pension shortfall
Independent, May 16, 2003
Inland Revenue (IR) admitted yesterday that it had deliberately refrained
from alerting nearly 13 million workers to a shortfall in their pension
dismissed earlier reports that a computer glitch had led to the failure to
tell relevant taxpayers they needed to top up national insurance
contributions or face reduced pensions. It said the annual deficiency
notification system had been suspended in 1998 because IR staff were
needed to focus on current pension and benefit claims.
move means that a third of the workforce, many on low incomes, will be
told over the next 15 months that they must pay between £200 and £1,630
if they want to receive the full £77.45 a week state pension. The average
payment will be £425.
news infuriated the National Pensioners Convention (NPC) and the Liberal
Democrats, both of which demanded an inquiry.
1998, deficiency notices were sent out annually to anyone who had gaps in
his or her national insurance payments, explaining what top-up should be
paid for that year.
IR spokesman said the notification system, which is now back in place, was
not a statutory requirement but a service offered to the public. He said
the decision was taken to suspend it during the transfer to a new national
insurance computer system.
was a business decision that had to be taken at that time," the
spokesman said. "People will have up to April 2008 to make payments
if they want to. No one will lose out – they will be given as much time
to pay as if they had been notified earlier."
Webb, Liberal Democrat pensions spokesman, said: "More than a third
of workers will get a brown envelope out of the blue telling them that
their pension is incomplete. It will be a nasty shock."
Bickerstaffe, president of NPC, said it was the latest in a series of
incidents that cast serious doubt over the entire system. "Hopefully,
this time the Government will realise that the payments system must be
simplified," he said.
The problem of unequal pay for women is compounded in retirement because it causes a pension gap, a joint study by Age Concern and the Fawcett Society said yesterday. Female pensioners receive less than a third of the income of men and almost a quarter of single women over 60 live in poverty.