State Pension Forecast: Could Old PAYE Errors Be Affecting Your Pension?

For many people, checking their State Pension forecast is a simple way to understand what they may receive in retirement. But what happens when the forecast doesn’t look right?

Missing National Insurance contributions may be linked to errors or incomplete records from older PAYE (Pay As You Earn) schemes. This can be particularly relevant for people who have changed employers several times. Or relevant for those that have worked for companies that later closed, or had employment records transferred between payroll systems.

Why your State Pension forecast matters

Your State Pension entitlement is based on your National Insurance record. To qualify for full state pension, you currently require 35 years of contributions. You will receive a partial pension with just 10 years of contributions.

That’s why checking your forecast isn’t just about finding out a future figure. It’s also an opportunity to check whether your National Insurance record accurately reflects your working history.

If you see gaps where you believe you were employed and paying National Insurance, then this is probably an error.

How old PAYE records can cause problems

PAYE systems have changed considerably over the years. Employers have merged, closed, or changed payroll providers, while HMRC records have also evolved.

In some circumstances, information from historic employment may not have been correctly matched to an individual’s National Insurance record. Payroll reporting errors, incorrect National Insurance numbers, duplicated records, or other administrative problems can potentially result in contributions not appearing as expected.

Not every gap may be an error, but if your record does not make sense, then it can be worth investigating it.

What to do if you’re not sure about your NI record

The first thing to do is to check your state pension forecast. You can check this here. If you notice gaps in your record, check these tie up with any periods of unemployment where you did not receive job seekers allowance or universal credit. If they do not match, then there may be an error. You can then contact HMRC and ask them to investigate any apparent discrepancies.

Don’t wait till retirement

Its important to check your NI record and pension forecast to know where you stand with your state pension well before retirement. If an error has affected your record, early identification gives you more time to establish what happened, and determine whether anything can be corrected. If you notice an error and don’t know where to start, please get in touch with Perrys who would be happy to assist you.