HUNDREDS of thousands of pensioners have been given an update on a Government error that left them out of pocket for years.
A Department of Work and (DWP) administrative error meant some pensioners – mostly women – were not paid enough through their , with some being underpaid for years.
The since 2021 and trying to identify those who have been affected.
In a major update, it has now said 130,948 people were affected and that the average underpayment was just over £6,000.
As a result the has had to pay out £804.7million.
The Sun previously reported a after contacting the DWP repeatedly about underpayments.
The DWP said last year it had found 119,050 people who were underpaid, meaning a further 11,898 people affected have been identified.
Most of those affected are:
- women on low state pensions, whose pension was not automatically uplifted when their husband retired
- Widows or widowers whose was not automatically reassessed when their spouse died
- Over-80s with low state pension entitlements who were not automatically uplifted when they turned 80
More than 50,000 of those underpaid were widows or widowers, 47,000 were married women, and 34,000 were over-80s.
Some of the errors date back to as early as 1985.
The DWP has been looking at hundreds of thousands of pension records to check if pensioners were paid the correct amount.
It says it has now reviewed the vast majority of records but it's still waiting for some people to contact them with information, meaning the review isn't likely to be fully completed until March 2027.
The Office for Budget Responsibility previously estimated the review could could eventually cost the DWP almost £3billion.
Rachel Vahey, head of public policy at AJ Bell, said this is “one of the biggest benefit scandals of modern times”.
“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,” she said.
“It is absolutely critical all those affected by this scandal receive the they are owed as quickly and efficiently as possible.”
The DWP has now called on pensioners to provide it with additional information so it can review each record.
Former pensions minister Steve Webb, who is now a partner at financial consultancy Lane Clark & Peacock, said: “We have become so used to stories about that it is easy to become dulled to the scale of what went wrong...
“The vast majority of those who lost were women, some of whom were underpaid for decades or even went to their grave never paid the right state pension.
“The remaining corrections need to be handled as a matter of urgency. This should never be allowed to happen again.”
And there's more people who have lost out
The DWP is also looking into another error affecting hundreds of thousands of mostly women.
As many as 370,000 people are thought to have missed out on Home Responsibilities Protection (HRP), a scheme set up to help protect parents' and carers' state pension.
The DWP started looking into this second error in January last year.
Those affected are mostly mothers who had children before the year 2000.
By September last year, HMRC had issued over 370,000 letters to people who might have missed out.
Some 19,000 applications were submitted to the DWP to reassess state pensions, and underpayments were found in just over 5,000 cases.
On average, each person had been underpaid £7,859, costing the Government £42million.
The DWP has not given a new update on how many corrections have been made regarding this error.
Former pensions minister Mr Webb estimates that between the two errors, it's likely the total bill will cost the Government more than £1billion.
Have you been underpaid?
You can check if you've been underpaid and whether you need to make a claim by contacting the Pension Service.
But you can also use thisdeveloped by LCP to help people understand what state pension they are entitled to inherit on top of their own state pension at go.lcp.com/inheritingstatepension.
The DWP also has a tool to help those receiving the assess their eligibility for inherited state pension amounts at gov.uk/state-pension-through-partner.
Plus, there is a guide on inheriting or increasing a state pension at gov.uk/new-state-pension/inheriting-or-increasing-state-pension-from-a-spouse-or-civil-partner.
