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Common concerns

Mistakes and overpayments

Sometimes, even the best run schemes make mistakes. It's very important that if you think a mistake has been made that you take action as soon as possible.

Sometimes, even the best run schemes make mistakes. It's very important that if you think a mistake has been made that you take action 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. If we don’t think we can help, where appropriate, we can guide you through making a complaint to the Pensions or Financial Ombudsman Services

Mistakes

If a pension scheme makes a mistake, it's normally the case that you do not have a right to the figures given to you in error. The basic principle is you’re entitled to your correct benefits, and not to figures quoted by mistake.

But, if because of the mistake you made decisions or spent money, and you would not have done this otherwise, compensation may be payable to make good the loss you’ve suffered. If this is the case you may have suffered financial detriment because of their error. Please see our leaflet ‘mistakes and overpayments’ for more information.

 

Overpayments

It's normally the case that you don't have a right to benefits paid to you in error. Your pension scheme can ask you to repay the amount. But it may be possible that you don’t have to repay some, or all, of the amount, if you’ve relied on the overpayment when spending or making decisions. If you do have to repay any overpayment, it may be possible to negotiate the period of time over which any repayments need to be made.

 

How can we help?

If there has been a mistake we will try to make sure you get your correct benefits.  And if you relied on the mistake to make decisions or spend money, we'll work with you and your pension provider to explore how the mistake has affected your finances.  

After you have contacted your scheme and given them a chance to resolve your complaint, if you remain unhappy, you can then send us copies of all relevant correspondence. Tell us how you relied on the mistake or the overpayment you received.  If you have evidence of your decisions or spending, please send that too. If we need to contact your pension provider, we will first ask for your authority to do so. 

If you're not sure how to do this or you want to talk this through, contact our helpline on 0300 123 1047 or web chat live. 

 

Compensation

Whether compensation is payable will depend on the circumstances of the case. If you relied on the mistake and you are worse off as a result, we will work with you and your pension provider to find an outcome that makes good that loss.

It may be you’ve not suffered a financial loss, but you’re upset because your benefits are lower than expected. If that’s the case, compensation for the distress and inconvenience you’ve suffered may be payable. But awards for this are modest – usually in the region of £50 to £250.

 

Frequently asked...

My pension provider says I should have known?

It may 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. Tell us why you thought the benefits quoted or paid were correct.

Don’t I have a contract?

If you have a contract, a mistake cannot break its terms.  But for a contract to be formed it is necessary for the following features to be present:

  • Offer
  • Acceptance
  • Consideration
  • Intention for form a legal relationship

It is not common  for all four features to be present.  

How quickly must I pay back an overpayment?

It is normally 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. Doesn’t that mean my scheme cannot ask me to repay?

If the mistake that led to an overpayment was made more than six years ago, it may be possible that overpayments made more than six years from when you are told of the mistake, do not 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.  Please talk us to if you think it may apply to you.

Where can I find out more?

If you need more information, please contact us. A pension specialist from our team will be happy to help with whatever pensions-related question you have. Our help is always free.

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