Thousands of pensioners in the UK have missed out on significant sums of money due to administrative errors made by the Department for Work and Pensions (DWP). According to recent government reports, these mistakes resulted in £450 million in underpaid State Pension claims during the last financial year.
The issue has raised alarm among retirees, campaigners, and former ministers, particularly because many of those affected belong to some of the most vulnerable groups in society. The DWP has admitted the scale of the problem and is actively working to rectify it, but the process is expected to continue until at least 2027.
Who Has Been Affected?
The DWP has confirmed that around 6 percent of State Pension claims were underpaid in the past year, up from 5 percent in the previous year. Over 130,000 pensioners have been identified so far as having been underpaid. The average shortfall ranges from approximately £2,203 for individuals over 80, to as much as £11,725 for some widows.
The groups most affected include:
- Married women who did not receive the correct pension based on their spouse’s National Insurance (NI) contributions.
- Widows and widowers who were entitled to inherit a portion of their late partner’s pension.
- Individuals over the age of 80 who missed out on automatic pension increases.
- Parents, especially mothers, who claimed Child Benefit before 2000 and were not properly credited with Home Responsibilities Protection (HRP).
What Caused the Underpayments?
The underpayments have largely been blamed on outdated computer systems, administrative errors, and a lack of automatic updates to individual pension records. In particular, problems with HRP credits, which were designed to protect parents (primarily mothers) who took time off work to raise children, have resulted in numerous pension shortfalls.
Many of these issues were not flagged until years later, and some would never have been discovered without the DWP’s ongoing internal review.
What Is the DWP Doing About It?
The DWP launched a large-scale correction exercise in January 2021 under the State Pension LEAP (Legal Entitlement and Administrative Practice) initiative. So far, more than £800 million has been paid back to over 130,000 affected individuals.
However, this is just the beginning. The full review of State Pension records is expected to take until March 2027. The total cost of correcting all underpayments could exceed £1 billion by the time the process is complete.
A DWP spokesperson stated:
“We are fully committed to addressing these historical errors as quickly as possible and ensuring people receive the support to which they are entitled.”
What You Can Do if You Think You’re Affected
If you suspect you or a family member might be affected by these pension underpayments, there are several steps you can take:
1. Check Your State Pension Record
Start by reviewing your current and forecasted pension payments. You can do this through the UK Government’s official pension service:
Check your State Pension forecast
2. Use the LCP Underpayment Checker
Lane Clark & Peacock (LCP), a financial consultancy firm led by former pensions minister Sir Steve Webb, offers a free online tool to help identify if you may be owed money:
3. Contact the Pension Service
If you think you’ve been underpaid, you can speak directly with the Pension Service. Call 0800 731 0469 or visit the official government page:
4. Submit Form CF411
For parents who claimed Child Benefit before 2000, missing HRP credits could be the cause of the underpayment. You can submit Form CF411 to correct your National Insurance record
Critics Say More Needs to Be Done
Although the DWP has acknowledged the issue and launched a correction plan, critics say the response has been slow and the damage already done to many pensioners’ financial security is significant.
Sir Steve Webb, who first brought widespread attention to the issue in 2020, commented:
“This is the biggest pension scandal of recent decades. Many of those affected are vulnerable and depend on their State Pension to get by. DWP must do more to ensure no one is left behind.”
Campaigners argue that the government must not only repay what is owed but also implement safeguards to prevent future mistakes.
Conclusion
The underpayment of State Pensions by the DWP has impacted thousands of people, particularly women, widows, and the elderly. While steps are being taken to correct the issue, the process is slow and ongoing.
Pensioners are encouraged to check their records and reach out to the appropriate government services to ensure they are receiving what they are entitled to. With more than £800 million already repaid and possibly hundreds of millions still owed, it is essential that individuals take the time to understand their entitlements and follow up if they suspect something is wrong.
