Pensioners in the UK have been underpaid a staggering total of £804.7 million in state pension benefits, with some individuals being owed as much as £12,000, according to an update from the Department for Work and Pensions (DWP). The department has been conducting a review to identify underpayments since January 2021, and the latest findings reveal that nearly 131,000 cases of underpayments have been recorded.
The Scale of the Issue
From January 11, 2021, to March 31, 2025, the DWP has identified 130,948 underpayment cases, amounting to over £800 million in arrears. While some pensioners have been overpaid in other benefits such as pension credit, the department also notes that in certain cases, the individual may have passed away, and the DWP has been unable to pay the arrears to their estate.
Who Is Affected by State Pension Underpayments?
The DWP has confirmed that several groups of pensioners have been impacted by underpayments. The affected individuals include:
- Married women on low state pensions whose payments were not automatically increased when their partner retired.
- People whose state pension was not reassessed after their spouse died.
- Individuals aged over 80 whose state pension entitlements were not automatically increased.
The DWP also clarified that some cases may be reviewed for multiple errors, meaning a claim could fall under more than one category.
How Much Could You Be Owed?
The DWP has provided average amounts for underpayments in specific categories:
- Widowed pensioners: £11,725
- Married women (category BL): £5,553
- Over-80s (category D): £2,203
Additionally, a correction exercise is currently underway to address missing periods of Home Responsibilities Protection (HRP), which has led to inaccurate state pension payments. As of September 2024, this exercise has identified 5,344 underpayment cases, amounting to £42 million in arrears.
Sir Steve Webb’s Comments
Sir Steve Webb, a former pensions minister, has been instrumental in uncovering state pension errors. He commented on the ongoing HRP correction process, stating that as the exercise progresses, the amounts paid out are expected to increase significantly. Reflecting on past errors, Sir Webb emphasized that women have been the most affected, some of whom have been underpaid for decades or, tragically, have passed away without receiving the correct amount.
“These corrections need to be handled with urgency. This should never have happened in the first place,” he said.
Industry Reactions
Rachel Vahey, head of public policy at AJ Bell, described the issue as one of the “biggest benefit scandals” of modern times, highlighting that the DWP’s miscalculations have left thousands of pensioners, especially women, shortchanged. She stressed that it’s crucial for the affected individuals to receive the money they are owed as quickly and efficiently as possible.
DWP’s Response
A DWP spokesperson assured that the department’s priority is to ensure that pensioners receive the dignity and security they deserve in retirement, while also striving to keep underpayment rates as low as possible. They confirmed that the majority of cases have been completed, with only a small number of cases pending due to the need for additional documentation.
The ongoing state pension underpayment issue highlights serious flaws in the system, especially affecting widowed pensioners, married women, and the over-80s. As the DWP works to resolve these issues and pay the owed arrears, it is vital that all affected pensioners receive the money they are entitled to.
FAQs
What is the total amount of state pension underpayments identified by the DWP?
The Department for Work and Pensions (DWP) has identified a total of £804.7 million in underpayments, affecting over 130,000 pensioners.
Who is most affected by state pension underpayments?
The groups most affected by underpayment errors include widowed pensioners, married women, and individuals aged over 80.
How much could I be owed due to state pension underpayment?
The average underpayment for widowed pensioners is £11,725, for married women is £5,553, and for over-80s is £2,203.
What is the HRP correction exercise?
The Home Responsibilities Protection (HRP) correction exercise addresses missing periods of HRP, which has led to inaccurate state pension payments. It has identified underpayments totaling millions.
How is the DWP addressing state pension underpayments?
The DWP is working to resolve underpayments by processing arrears payments and ensuring that pensioners receive the correct amount. Most cases have been resolved, with some still pending additional documentation.
