LM2576 output voltage error
I am just testing it on breadboard so have not connected the
  capacitors and diode at the output.


That's just plain ignorance. All bets are off if you don't have the flyback diode because it IS an integral part of the energy reclamation into the output capacitor (also not fitted) from the inductor.

The diode also prevents (as a side issue) back emfs from the inductor harming the chip.

The other issue is that without the output capacitor the voltage across the potential divider will be a somewhat distorted square wave and not representative of anything when measured with a multimeter.

It's like trying to drive a car with the tyres removed.