John Lewis' future pensions liabilities are expected to increase by around £7m after a recent discovery of a holiday pay blunder.

Following a review of the partnership's holiday pay policy, it was discovered that partners who receive certain holiday additions to pay, such as premiums for working on Sunday or bank holidays, have not been paid correctly.

As a result, John Lewis will repay around £40m to those who have been affected by the error.

Around 69,000 current partners will receive an additional one-off payment this month to reflect the amount due to them back-dated to 2006, and more than half of the recipients will receive under £120.

According to the partnership's latest accounts, its pensions liabilities currently stands around £638m.

Tracey Killen, John Lewis director of personnel, said: "As soon as we established that we were not implementing the Working Time Regulations correctly, we worked quickly to make the repayments to our partners in a way that is both fair and responsible."

John Lewis' pay systems have now been updated to ensure that all future holiday payments are correct, and the change is expected to add around 0.5% to its annual pay costs.

First published 22.08.2013

monique_simpson@wilmington.co.uk