Help Pension underpaymeny

[Notquitegrownup2]

Helping a friend. She has received a letter saying her pension contributions were underpaid 20 years ago. She owes £800 plus £700 interes!

Contacted her pension people who say she has to pay, as it is the employee's duty to check that she is paying correctly. CAB confirmed this.

However the pension people have just admitted in an email to us that they knew of this in 2013 but 'fpr some reason' did not invoice her. She would have probably paid £400 less in interest if they had done so. Does she have a right to complain on those grounds? £400 would mean a lot to her - she really isn't well off!

TIA

@Notquitegrownup2 your friend really needs specialist advice. I suggest she starts with the pension regulator https://www.thepensionsregulator.gov.uk/

My thoughts are to offer to pay the £800 underpayment, possibly by instalments, asap. This should stop the interest continuing to accrue.

Dispute the interest from 2013, if possible find out the interest from 20 years ago to 2013 and again pay that, possibly by instalments.

Another option is to ask them to offset the debt against the benefits she will get at retirement. This will mean she still owes the money but it would be collected once she claims her benefits. The advantage of this is that she wouldn’t have to pay it now, but they will probably continue adding interest to the debt so she will end up paying more in the end.

It’s definitely worth raising a complaint about why they didn’t solve this in 2013 though, if they have admitted they knew then that there was a problem.

By the way, the Pensions Regulator won’t be any help here as they don’t offer an advice service to scheme members. The correct route would be the Pensions Ombudsman which has an advisory arm to help with complaints, but they will expect you to have gone through the pension company’s complaints procedure first.

Thanks so much. So - she will pay off a good chunk to avoid accruing more interest, hold some back, complain via the company's own complaints procedure, then off to the pensions ombudsman. Thank youuu

Sorry I gave the regulator not the ombudsman, thanks for correcting @ChessieFL

Good luck.