DWP pension update as 180,000 women owed thousands of pounds | Personal Finance | Finance

More than 180,000 women are still owed thousands of pounds in unpaid pensions after the Department for Work and Pensions failed to send them the money. Just 12,379 victims of the underpayment scandal have been identified after five years – leaving an estimated 180,000 people still waiting for payments of thousands of pounds.

The Department for Work and Pensions set aside £1.1 billion to be sent as arrears to the women affected, but only £104 million has been paid out so far. Sir Steve Webb, partner at pension consultants LCP and a former pensions minister, said: “It is deeply disappointing that efforts to track down mothers being underpaid their state pension have so far failed to reach the vast majority of those who the Government thinks have lost out.”

LCP published a report in 2020 revealing that tens of thousands of married women covered by the old state pension system which existed up to 2016 may have been underpaid. The Department for Work and Pensions (DWP) began work to correct the errors in 2021.

It sent 370,000 letters to women who might be affected. However the response rate was low and new research published by the DWP revealed this is partly because the Government is encouraging people to use an online tool to check if they might be eligible for extra payments, while some older people are not confident using the internet.

In addition, many recipients said that they thought the letters might be scams, and others simply assumed they would not be eligible.

Sir Steve said the Government’s approach made it inevitable that many women would fail to receive the money they are owed.

He said: “Writing letters to elderly people which guide them towards a two-stage online process was always going to have a low success rate. People are understandably wary of scams, and expecting them to do their own online eligibility check before submitting an online claim was bound to put many people off.

“Whilst DWP deserve credit for conducting research into the reasons for the failure of the strategy so far, it is vital that efforts are now redoubled to make sure that far more people get the state pension that should have been theirs by right.”

An inquiry found the DWP had made pension payment errors since 1985, caused by “the Department’s use of outdated systems and heavily manual processing, coupled with complacency in monitoring errors”.

A Government spokesperson said: “We are determined to help people who have been left out of pocket as a result of historical errors which are no fault of their own.

“That’s why we wrote directly to over 370,000 of those who were potentially affected and launched an online tool to help people check if they needed to claim.

“We carried out an extensive campaign to raise awareness of the issue and will continue regular communications to get people to check their National Insurance record.”