Workers missing out on £10,000 or more in pension due to error

Tens of thousands of pensioners could be missing out on £10,000 in extra money as a result of errors. According to MoneySavingExpert, those in the Teachers' Pensions scheme run by Capita have been experiencing delays in receiving payments and in claiming on behalf of someone who has died. The problems also stem from a 2018 court ruling.

Between 2014 and 2015, the Government moved most public sector employees, including teachers, to new pension schemes, which saw workers moved from final salary pensions based on pay near retirement to career average pensions, which are measured on average earnings over their whole career.

Those within 10 years of retirement remained on the old, more generous scheme. However, younger employees were moved to the new scheme in 2015.

Those on the new scheme challenged the move, calling it unfair.

The High Court ruled in their favour back in 2018, and as a result, the Government moved all workers to the career average scheme by March 2022.

Despite the move, different rules remained in place for different workers between 2015 and 2022, leading the Government to create the "McCloud remedy", which allowed those affected by the change to choose whether their pension benefits for those seven years are calculated under the final salary or career average rules.

The process begins with the pension provider issuing a personal "remediable service statement" (RSS) to those affected, which will compare the pension benefits between your original scheme and the 2015 one.

Depending on what the member chooses, this could mean £1,000s or even £10,000s in backdated payments. In some cases, you may be asked to repay money if you choose a lower pension benefit than the one you are currently receiving.

The Government's original deadline to issue all of these notices was early 2025, but this was later pushed back.

A Department for Education spokesperson said: "We understand and recognise the disruption that delays have caused for some teachers - the Transitional Protection (McCloud) remedy is one of the most significant changes to public service pensions in recent years, and delivery is being phased to ensure accuracy and fairness for members due to a complex process."

A spokesperson for Capita said: "Capita administers the Teachers' Pension Scheme on behalf of the Department for Education and in line with scheme regulations.

"The scheme has experienced a sustained increase in complexity and volumes in recent years, including as a result of regulatory changes, which has contributed to delays in some cases."