The Department for Work and Pensions (DWP) in the UK has revealed a concerning discovery: pensioners have been underpaid a staggering £804.7 million in total, with some individuals owed as much as £12,000.
This revelation comes as part of an ongoing effort by the DWP to rectify state pension underpayments, a process that began in January 2021. Let’s break down the facts and key details surrounding this issue.
Overview of the Underpayment Issue
Since January 11, 2021, the DWP has been investigating errors related to state pension underpayments. The department’s latest update highlights that between January 2021 and March 2025, a total of 130,948 underpayments have been identified, amounting to £804.7 million.
In certain instances, beneficiaries may have received overpayments of other benefits, such as pension credit, the DWP clarified.
Additionally, the DWP mentioned that some pensioners affected by underpayments may have passed away, and as a result, it has been difficult to identify the estates to which the arrears should be paid.
Who Is Affected by These Underpayments?
Several groups of people are being impacted by these underpayment errors, including:
- Married Women with Low State Pensions
These individuals did not see their state pension automatically increased when their partner retired. - Widows or Widowers
People whose pensions were not automatically reassessed upon the death of their spouse. - Over-80s Pensioners
Those over the age of 80 who did not have their state pension entitlements increased automatically.
In some cases, the DWP is checking for multiple potential causes of error, which means that some claims may fall into more than one category.
How Much Could You Be Owed?
The DWP has shared the average underpayment amounts for different groups affected by these errors:
| Category | Average Underpayment |
|---|---|
| Widowed Pensioners | £11,725 |
| Married Women (Category BL) | £5,553 |
| Over 80s (Category D) | £2,203 |
The ongoing correction exercises are also investigating missing Home Responsibilities Protection (HRP) periods, which led to inaccurate state pension payments.
Between January 8 and September 30, 2024, 5,344 underpayments were identified, totaling approximately £42 million in arrears.
Impact and Urgency of the Issue
Sir Steve Webb, a former Liberal Democrat pensions minister, has been closely involved in uncovering state pension errors.
He noted that the amounts paid out under the current HRP correction exercise are expected to rise significantly as more cases are processed. A similar HRP correction effort over a decade ago led to state pension arrears payments totaling £83 million.
Webb emphasized the significant impact on women, who have been disproportionately affected by these errors, some of whom were underpaid for decades and, tragically, passed away without receiving the correct state pension payments.
He urged that these remaining corrections be handled with urgency to prevent similar mistakes in the future.
Expert Opinions on the State Pension Underpayment Issue
Rachel Vahey, Head of Public Policy at AJ Bell, expressed her concern about the scale of the problem, calling it one of the biggest benefit scandals of modern times. She criticized the DWP’s miscalculations that left thousands of pensioners, particularly women, short on their state pension payments.
Vahey emphasized the need for prompt action to ensure that all affected individuals receive the money they are owed as quickly and efficiently as possible.
A spokesperson from the DWP reassured the public, stating that their top priority is ensuring pensioners receive the dignity and security they deserve during retirement.
They also highlighted that they have now completed the majority of the cases as planned, with only a small number of outstanding cases due to missing documentation from the customers.
The discovery of £804.7 million in underpayments has highlighted significant flaws in the state pension system, particularly affecting women and elderly pensioners. The DWP is taking steps to address the issue, but the process is ongoing, and many pensioners are still awaiting the funds they are owed.
It is crucial that the DWP resolves these issues promptly, ensuring that pensioners receive the financial support they deserve without further delay.
FAQs
How many pensioners are affected by underpayments?
Over 130,000 pensioners have been impacted, with £804.7 million in underpayments identified so far.
Who is most affected by state pension underpayments?
Married women, widows, and over-80s pensioners have been the primary groups affected by these errors.
How much could I be owed due to underpayment?
The average underpayment is approximately £11,725 for widowed pensioners, £5,553 for married women, and £2,203 for pensioners over 80.