Interest on underpayment for 5 years

mjs19780 · 22 May 2018 at 6:54PM

Hi,

My wifes employer has just found out that through a mistake, she was missed when her pay was increased 5 years ago to a different grade.

Obviously, its good that the employer has come forward (its local authority). There are some complications as she was on maternity twice in the 5 year period so they are calculating how much they owe us.

I was wondering about interest though aswell - should we be due that aswell and do the government recommended a standard interest rate to be applied?

Thanks, Mike

System · 23 May 2018 at 11:01AM

mjs19780 wrote: »

Hi,

My wifes employer has just found out that through a mistake, she was missed when her pay was increased 5 years ago to a different grade.

Obviously, its good that the employer has come forward (its local authority). There are some complications as she was on maternity twice in the 5 year period so they are calculating how much they owe us.

I was wondering about interest though aswell - should we be due that aswell and do the government recommended a standard interest rate to be applied?

Thanks, Mike

Though you have grounds to ask, I don't think you'll get it. Interest rates are low, plus would you have banked that increase anyway?

Carrot007 · 23 May 2018 at 11:04AM

Presumably the difference in pay was so low you did not notice.

As such the interest is not going to be much either.

ReadingTim · 23 May 2018 at 11:14AM

The Bank of England base rate might be a good place to start but the different between charging it and not charging it is likely to be in the pennies rather than the pounds - hardly worth falling out about, or harbouring bad feeling.

ScorpiondeRooftrouser · 23 May 2018 at 12:45PM

Carrot007 wrote: »

Presumably the difference in pay was so low you did not notice.

Well not necessarily. If she should have been raised a grade and wasn't, her pay just remained the same. The issue appears to be that she wasn't aware she should have been raised a grade, not that she thought she had been and didn't notice the disparity.

Lungboy · 23 May 2018 at 12:52PM

I'd be very interested in making sure they got the pension correct, 5 years at a higher grade would be a fair bit of extra pension.

Silvertabby · 23 May 2018 at 1:07PM

Nightmare for the LGPS administrator who will have to calculate the arrears manually (been there, done that).

Compounded interest on the extra tax free lump sum (we used bank rate plus 1%) is easy enough to calculate, but they may or may not pay interest on the actual pension arrears.

mjs19780 · 23 May 2018 at 8:03PM

Cool - thanks for the replies - for some reason, i`m not getting the email updates even though i`m subscribed!

I would definitely have noticed, but we were under the impression that there was a pay freeze for local gorvernment workers for the last few years, so never queried it.

They think they owe us around £4.5k so not an small amount! My wife turned part time though near the start of the 5 years because of us having kids, so i think they are basing that on her full pay, so i think its more like half of that really - about £50 a month (ish).

I `ll wait with baited breath to see what they come up with, but i can fully appreciate that it will not be straightforward for them to work out giving the 2 maternity leave periods in the middle of it all!

Pension ! I never thought of that aswell - it gets more complicated!

Thanks, MIke

Interest on underpayment for 5 years

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