Dealing with mistakes and overpayments with your pension

Sometimes, even the best run schemes make mistakes. If you think a mistake has been made, it’s important to act as soon as possible. We can help if you think there’s been an error, or your scheme tells you a mistake has been made. If you’re struggling to work out what to do next, talk to us.

What happens if there’s a mistake

If a pension scheme makes a mistake, you don’t usually have a right to the figures given to you in error. The basic principle is that you’re entitled to your correct benefits, and not to figures quoted by mistake.

If a pension scheme provider realises they’ve made a mistake in the amount of pension they’ve been paying you, the trustees have a duty to correct this.

This means that if they’ve been paying you too much they can reduce your future payment to the correct amount and ask for the overpayments to be returned.

  • Mistakes are correctable.
  • The sooner you identify a mistake and let the pension scheme know, the more options you’ll generally have to fix the mistake.
  • Overpayments can be recovered, but the amount to be repaid can be limited.
  • Compensation might be payable if you’ve suffered a financial loss or have suffered distress and inconvenience.
  • We can explain your situation and support you with any next steps this might include, such as recommending that you contact the Pensions Ombudsman.

Compensation

Did you make decisions or spend money because of the mistake? Then compensation might be paid, to make good the loss you’ve suffered. This is known as suffering a financial detriment because of their error.

How quickly must I pay back an overpayment?

It’s usually reasonable to allow you to repay an overpayment over the same period it was paid. For example, if you’ve been overpaid for two years, you should be allowed two years to repay.

The mistake was made 10 years ago – does that mean my scheme can’t ask me to repay?

If the mistake that led to an overpayment was made more than six years ago, it might be possible that overpayments made more than six years from when you are told of the mistake, don’t need to be repaid.

This will depend on if it was reasonable for the mistake to have been found earlier than it was. This is a complex area. Talk to us if you think it might apply to you.

Whether compensation is paid will depend on the circumstances of the case. It might be that you haven’t suffered a financial loss, but you’re upset because your benefits are lower than expected. If so, you might be paid compensation for the distress and inconvenience you’ve suffered.

You can contact us to discuss the circumstances of the mistake or overpayment. We can then provide you with all the information and next steps to get your situation resolved.

My pension provider says I should have known

It might be unlikely a pension provider will agree to pay compensation or reduce the amount of overpayment they ask you to repay, if they think that you should have known a mistake was being made. When you contact us, you can tell us why you thought the benefits quoted or paid were correct.

Do I have a contract with my pension provider?

If you have a contract, a mistake can’t break its terms.

But for a contract to be formed, the following features are necessary:

  • offer
  • acceptance
  • consideration
  • intention to form a legal relationship.
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Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

Continue to website
Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

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