Probe into £15bn pensions top-up botch completed

An inquiry into the fiasco that led to 10 million low-income workers facing shortfalls in their state pensions has been completed.

The Inland Revenue came under fire last month after it was revealed workers had not been informed for five years that their national insurance contributions were up to £1,500 short.

A decision to stop sending out the top-up notices in 1998 was made because resources were tied up in dealing with "serious" problems with the rollout of the National Insurance Recording System (Nirs2) at the time.

Paymaster General Dawn Primarolo made a written statement to MPs this week saying the Inland Revenue had accepted the inquiry’s recommendations.

"In the course of the inquiry, the Inland Revenue have confirmed that no Minister was consulted or informed of the decision to suspend deficiency notices at the time it was taken in 1998," she said.

The tax office will now publish details of how it plans to issue deficiency notices in respect of the years since 1996/1997.

Primarolo was also forced to admit to MPs this week that the IT tax credit system developed by EDS is experiencing problems.