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Pensioners lose out due to "blunder"?


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This article appeared in one of the "pinks" and should interest many on here:-


"Demand is growing for the government to investigate claims that workers and pensioners have lost out, owing to inflation miscalculations by the Office of National Statistics (ONS).


An independent investigation by Fund Strategy magazine revealed last week that the Office for National Statistics probably miscalculated its official measures of inflation in the years 1997-2009.


The income received by pensioners and benefit claimants is also linked to official measures of inflation, which aim to reflect the rising cost of living in Britain.


The Department for Work and Pensions dismissed the difference between past and present calculations as a “methodological improvement” rather than evidence of an error. In effect, however, higher than reported inflation could have cost wage earners, as higher prices eroded disposable incomes and wage increases failed to keep pace.


The error initially came to light as part of the Bank of England’s Inflation Report in February, which found that the ONS may have underestimated the impact of clothing prices on consumer prices index (CPI) and retail prices index (RPI) inflation. RPI has been used as a benchmark for benefit and pensions payments and for wage negotiations.


Dot Gibson, the general secretary of the National Pensioners Convention, joined calls for an investigation.


She said: “This may appear at first to be an academic point, but the reality is that how inflation is calculated affects how much pension people receive, and if the ONS has made a mistake, then pensioners should be compensated.” "




Put simply, the people that calculate inflation seem to have "nudged the figures down a tad" during 1997 to 2010 and this only came to light when the Bank of England was instructed by the new coalition government to review how the previous government obtained the data that it worked with.


The upshot is that over the 14 years or so - based upon the more "usual" calculation methods inflation would have been 5% higher - so it seems that Gordon Brown oversaw a bending of inflation reality by about 0.36% a year.


So all you pensioners out there :-S - how do you feel knowing that your OAP pension should be circa 5% more than it currently is?



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Clive, If I owed the tax man 5% he would want it back with interest so I will accept the 5% that has 'mistakenly' been under paid to me, with gratitude, and interest.

Some hope..!! 

Tony Blair and Gordon Brown must have been the two most two faced p***k's ever to be in charge of a government.


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CliveH - 2011-03-29 5:10 PM

The upshot is that over the 14 years or so - based upon the more "usual" calculation methods inflation would have been 5% higher - so it seems that Gordon Brown oversaw a bending of inflation reality by about 0.36% a year.


The first rule of socialism is -


All brothers are equal except for some brothers which are more equal than others - the less power you have the less equal you are and the more power you get, by whatever means, the more equal you become.


Cynical? Me? You betcha I am!

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There are more "blunders" than ever it seems - and yes there is a big one re the OAP:-


"The error by HMRC affects an estimated 146,000 people who have had a state pension and a private income.


HMRC failed to add the state pension on to their other income before it worked out the code for deducting tax on their pay or private pension.


As a result, the state pension has not been taxed and the people affected will normally owe tax of 20% of the pension paid in this tax year.


Consequently, they have paid too little tax for the last 12 months. HMRC will ask them to repay an average of £800, but it could be a lot more for people with a state pension of more than £100 a week, who reached pension age early in the tax year.


HMRC admitted the error but said repayments would be spread over three years from 2012.


HMRC told BBC Radio 4's Money Box that because the mistake was found in the current tax year, it had no legal power to write off the estimated £130m which was owed.


It also said it would not be fair to other taxpayers to write it off. "




On a personal note - we are battling HMRC re my son’s tax affairs. Whilst Sched E taxpayer the taxman got it into their heads that he owed some Sched D tax because they thought he had some self employed earnings. That in its self would have been OK because it would have been a simple matter to put right.


BUT - HMRC got not only his National Insurance number wrong but our post code as well. So letters went astray and even when we did get the letters on trying to phone HMRC to sort the problem out, on each occasion we failed the identity checks because the NI number is wrong.


Only by quoting the wrong NI number they had for my son did we end up talking to someone - but that someone refused to see that my son never had any sched D earnings and therefore did not need to complete a tax return because the NI number he actually has proved only Sched E earnings!


This moron said that as far as "the computer" said, two fines of £100 for late return were on file with £6 interest and that my son has 14 days to pay or the bailiffs will be called.


We are currently awaiting a reply from the Inspector of taxes dealing who have been sitting on this for weeks.


We have just (in writing) accused HMRC of harassment and appalling administration such that great and unwarranted stress has been caused by their actions.


I do not hold out much hope because knowing the sort of people dealing with this (DON'T get me started again on how GREAT the average Public Sector worker is!! >:-( - but anyone who deals with them on a daily basis will know what I mean) - I suspect that the mess will continue until huge amounts of time effort and money will be used to "fix" a problem caused by a mistake by an unaccountable Public Sector.


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I do sympathise Clive as I too have had dealings with the high calibre staff employed by HMRC and their ineptitude and polite but obstructive attitude can be quite staggering to those of us who have to earn our own unguaranteed income and pension.


For over 40 years I have always checked my tax code and actual deductions and it has been wrong more times than I can remember.


Usually they put it right quickly and fairly but just occasionally I must have come into contact with the same pratts that Clive has as it has taken ages to get them to accept their mistake and grudgingly put it right.


I don't think HMRC is dishonest but, like government, it is very economical with the truth, inept and arrogant at times.

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Madmaggott - 2011-03-31 7:06 PM

not allowed to use their own common sense; they just have to stick to the procedures regardless!


I though Mr Common Sense died years ago and was buried 12 feet deep to stop them coming back, alongside his good mates Mr Self Discipline and Mr Initiative.


Either that or the one size fits all pidgeon holing of everyone by the education system in recent years means that nobody under a certain age even knows what common sense is any more!

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