DWP underpaid some state pensioners by nearly £6,000 each | Personal Finance | Finance

Fresh figures from the Department for Work and Pensions (DWP) have revealed state pensioners were underpaid by nearly half a billion pounds in 2024/25. Not only did the rate of underpaid state pension claims increase, with six out of every 100 pensioners not receiving their full entitlement last year compared to five in 100 the previous year, but this oversight has put them at a combined loss of £450 million.

On average each affected pensioner missed out on £5,770.

The mishaps predominantly affected parents, with mothers being notably short-changed due to not obtaining credits for time spent raising children at home. This has surfaced even after the DWP executed a major “correction” operation over four years, reimbursing £800 million in overdue payments to more than 100,000 elderly people, including widows, married women, and those over 80.

Currently, amid these concerning revelations, the DWP, in collaboration with HM Revenue and Customs (HMRC) is proactively contacting those who might be missing out on Home Responsibilities Protection (HRP). HRP was a form of National Insurance credit aimed at reducing the number of years needed to qualify for a state pension – often claimed by those pausing their careers to provide care for family members or children.

It was succeeded by National Insurance credits in 2010. Yet HMRC is now conducting an investigation after it came to light that Child Benefit claim forms submitted before the year 2000 didn’t request a National Insurance number, reports the Mirror.

This oversight suggests thousands may have been incorrectly granted Home Responsibilities Protection (HRP), impacting their state pension amounts. The majority likely affected are stay-at-home mothers who claimed Child Benefit between 1978 and 2000, with new figures on the matter expected imminently.

Further troubling news came as recent data indicated the DWP mistakenly overpaid £90 million last year due to its errors. Speaking out on the pensions chaos, Sir Steve Webb, ex-pensions minister and partner at LCP pension consultants said: “It is astonishing that six in every 100 state pensioners are being underpaid.

“In some cases these underpayments have been going on for years and could amount to thousands of pounds.”

Stressing the significance of accuracy in pension payments, Sir Steve continued: “When people have worked hard all of their lives, they have a right to expect that their pension will be paid at the correct rate. Given how complex the system is, it can be hard for people to know if they are getting the right amount or not, so it is all the more important that the Government gets it right.”

He went on to say: “You would have hoped that all of the recent correction exercises would have resulted in a falling rate of errors, so it is all the more shocking to see underpayment rates increasing. DWP need to redouble their efforts to track down these errors and fix them as a matter of urgency.”