Latest World Breaking News Online News Portal
Between 11 January 2021 and 31 March 2025, the government said it had identified 130,948 state pension underpayments, owing pensioners an amount getting on for what experts estimate may be as much as £1 billion.
The historic correction exercise started in March 2021 when the Department for Work and Pensions (DWP) began checking hundreds of thousands of pension records to establish if pensioners have been underpaid
The Office for Budget Responsibility has previously estimated the correction exercise could eventually cost the DWP almost £3 billion.
The DWP has confirmed to the Work and Pensions Committee that they have completed the vast majority of reviews, but are still waiting for people to contact them with information meaning the exercise won’t be fully completed until March 2027
Rachel Vahey, head of public policy at AJ Bell, said: “This is one of the biggest benefit scandals of modern times. DWP miscalculations have left thousands of pensioners – mainly women – short on their state pension payments.
“The DWP has obviously been hard at work over the last six months, identifying another 11,000 cases of underpayment, which has ratcheted the bill up from £736 million to a staggering £805 million today.
“But despite this progress, this appalling situation is not yet resolved. The DWP has confirmed they have completed the vast majority of reviews, but it will take another two years, to the end of March 2027, before all cases are resolved.
“It is absolutely critical all those affected by this scandal receive the money they are owed as quickly and efficiently as possible. The DWP is calling on customers to provide additional information to put an end to this sad episode. But that relies on these people getting online and engaging with the DWP. You can check if you’ve been underpaid and whether you need to make a claim by contacting the Pension Service.
“Once all compensation has been paid, the government needs to undertake a comprehensive review of its processes to ensure these mistakes are never repeated. Trust in pensions is fragile at the best of times and failures such as this will not help. Sadly, it will likely take years, if not decades, to rebuild the confidence lost as a result of this scandal.”
The scandal of state pension underpayments relates to those who should have been entitled to uplifts under the pre-2016 system, but due to administrative errors did not receive them. These errors have been found to date back as far as 1985.
The main people likely to have been underpaid their state pension include:
- Pensioners who are receiving a low basic state pension in their own right, but are entitled to increase it using their living spouse or civil partner’s contributions once their partner becomes entitled to state pension (these are also called ‘Category BL’ pensioners);
- Widows and widowers who are not entitled to a full basic state pension based on their own contributions but who have inherited a basic state pension from their spouse or civil partner up to the full basic state pension rate;
- Men and women previously receiving no or low amounts of basic state pension, who may be able to increase their state pension from age 80 (also known as Category D pensioners).
A DWP spokesperson said its priority is ensuring pensioners receive the dignity and security they deserve in retirement and that State Pension underpayment rates remain as low as possible.
They said: “We have now completed the vast majority of cases in the exercise as planned with a small number of outstanding cases due to further documentation needed from the customer.”
