I’ve been told that ChatGPT and its equivalents will mean that there will be no need for benefits calculators or advisers in future. Not only will they provide an easy path through the complicated morass of benefits law and practice but they’ll also be able to find the loopholes and the best options for maximising entitlements.

I thought I’d try them out with an entirely arbitrary question that relates to some work that I’m currently involved in.

This demonstrates their huge inaccuracies in an area that I know a little about.

  There’s no reason to expect greater accuracy in other areas.  I asked ChatGPT and Bard (Google’s equivalent) a simple (to me) question and got, different, very wrong answers.

Q. What is the notional income from £50,000 of untaken pension savings for Pension Credit

This is entirely wrong. These are, sort of, the deemed income rules generally applying to capital.  They don’t apply to untaken pension savings, which are treated in a totally different way. Those are calculated using a set of notional annuity value tables from the Government Actuaries Tables (GAD Tables), the current 15 year gilt rate returns, the age of the claimant and the amount of savings.

They’ve also not applied a basic part of the calculation and taken off the first £10,000 of capital before calculating the deemed income, which should therefore be £80 a week.

Bard
As of October 2022, the notional income from £50,000 of untaken pension savings for Pension Credit purposes is £12,500. However, this is just a starting figure and it may be higher or lower depending on your individual circumstances.

The amount of notional income that you have is used to calculate your Pension Credit entitlement. The more notional income you have, the less likely you are to be entitled to Pension Credit. However, it is important to note that notional income is just one factor that is considered when calculating your entitlement. Your age, income and savings will also be taken into account.

Here is a table that shows the notional income from £50,000 of untaken pension savings for Pension Credit purposes for different age groups:

Age              Notional income
65-69           £12,500
70-74           £13,850
75-79           £15,200
80-84           £16,550
85-89           £17,900
90+              £19,250

As you can see, the notional income increases with age. This is because the Government assumes that older people are more likely to need their pension savings to supplement their income, even if they are not yet claiming Pension Credit.

I have no idea what this means, or where these numbers come from.  In October 2022, 15 year gilt rates, used to assess the notional income,  peaked at over 5%. I used Ferret’s Notional Pension Income Reckoner to assess the results using that rate and the lower age of their age ranges and got:

65-69               £3,650
70-74               £4,100
75-79               £4,850
80-84               £6,100
85-89               £8,050
90+                  £8,050

Using the Deemed / Tariff income calculation, as ChatGPT did (but correctly this time), would produce £4,160 annually.

I have no idea where they have derived their figures.

As for their last paragraph…. .  I’d welcome suggestions about the meaning.

In general, I do hope that their exclusions of liability are well drafted as I can see people making important decisons about  their financial, and other, actions on equally misleading (or plain wrong) results.

As for other areas of accuracy, I’m writing this from just outside Monmouth which is, so ChatGPT tells me, “in the Welsh speaking heartlands although many people in the town also speak English”.  If only…