Thousands of UK pensioners are set to receive substantial increases in their state pensions due to a historic error by the government.
However, many may not be aware of their eligibility or the process to claim their due payments. This article explains who has been impacted, how much money is owed, and how to take action.
Historic Underpayment of State Pension: Key Facts
The Department for Work and Pensions (DWP) has revealed that it has underpaid £800 million in state pensions, severely affecting retirees’ finances. This issue has been identified through an extensive review process that began in 2021.
Amount Owed to Pensioners
The DWP’s latest figures show that 130,948 pensioners have been underpaid, totaling an astonishing £805 million. This sum is part of the ongoing effort to correct pension calculations and ensure retirees receive their rightful payments.
Who Has Been Affected by the Underpayment?
Several groups of pensioners have been particularly impacted by this mistake, including:
Married Women with Low Pensions
Married women who were receiving low state pensions may have missed out on an automatic uplift when their spouses retired. These individuals are estimated to be owed an average of £5,553.
Widows and Widowers
People whose pensions were not reassessed after the death of their spouse are owed an average of £11,725.
Over-80s Pensioners
Pensioners over the age of 80 whose entitlements were not automatically increased are owed an average of £2,203.
How to Check If You Have Been Underpaid
The DWP has indicated that the majority of the pension underpayment cases have been completed, with only a few remaining due to the need for additional documentation from affected individuals.
According to LCP, a consultancy firm assisting with the process, certain groups, such as married women, widows, and those over 80, will receive their payments automatically. However, other groups, like married women whose husbands reached the age of 65 before March 17, 2008, or women who divorced after reaching pension age, will need to contact the DWP to request a reassessment of their pension.
For those who are unsure, LCP offers a calculator on its website to help individuals check their eligibility and calculate the amount they may be owed.
How to Claim Your State Pension Underpayment
Pensioners who suspect they have been underpaid should reach out directly to the Government’s Pension Service. Experts have referred to this error as one of the largest benefit scandals in recent history.
- Rachel Vahey, Head of Public Policy at AJ Bell, stressed that it is essential for affected individuals to receive their back payments quickly and efficiently.
- Sir Steve Webb, Partner at LCP, called for immediate action to correct the remaining cases, emphasizing that such errors should never happen again.
What the DWP Has to Say
In response to the underpayment scandal, the DWP stated:
“Our priority is ensuring pensioners receive the dignity and security they deserve in retirement, and we are working hard to keep underpayment rates as low as possible.”
The DWP’s state pension underpayment error has left many Britons owed significant sums of money. While many pensioners will receive their back payments automatically, others will need to contact the Pension Service to ensure their entitlements are corrected. It’s vital that affected individuals act promptly to claim what is rightfully theirs.
FAQs
Who is most likely to be affected by the pension underpayment?
Married women with low pensions, widows or widowers, and pensioners over 80 are the most affected.
How much money is owed in total due to the pension underpayment?
The total amount owed to pensioners is £805 million.
How can I check if I’m eligible for a pension top-up?
You can check eligibility using the calculator provided by LCP or by contacting the DWP directly for a reassessment.