A pensions minister has insisted that the UK Government is “working hard” to correct historical State Pension errors and ensure they are not repeated during a debate in the House of Lords on May 16. Conservative frontbencher Viscount Younger of Leckie was speaking after being challenged over official figures that revealed an increase in underpayments from £540 million in 2022 to £670 million in the financial year ending in 2023.
Viscount Younger told Labour peer Lord Davies of Brixton that the Department for Work and Pensions (DWP) has drafted in more than 1,300 staff to tackle State Pension underpayments. The issue largely affects women retiring under the old State Pension system when many did not receive the State Pension payment they were entitled to under their husband’s National Insurance record.
Other women did not get uplifts to their weekly State Pension payments that they were entitled to when their husbands died. Arrears payments can average as much as £11,500, for widowed women.
Last year’s underpayments total was more than six times the £100 million that was overpaid in state pensions in the financial year ending 2023. Overpayments were down from £130 million the previous year.
The latest DWP 'Fraud and Error' report said official error was the main cause of State Pension underpayments, accounting for £580 million in the financial year ending in 2023. Underpayments due to claimant error accounted for £90 million.
The report, published last week, also said that failure by the DWP to take action on changes to marital status or at age-related trigger points remained the main source of official error underpayments. Issues included the incorrect recording of National Insurance contributions and pensions not being uplifted for people who had been widowed and were entitled to amounts inherited from a partner.
Lord Younger told peers: “The Government is fully committed to ensuring that state pension error is put right as quickly as possible. Over 1,300 staff have been recruited or redeployed to the ongoing state pension underpayment correction exercise with case reviews expected to significantly increase this year.
“This is an issue that dates back many years and we are working hard to correct these historic errors and ensure they do not happen again.”
But highlighting the increase in underpayments, Lord Davies of Brixton pointed out the problem was “getting worse”. He said: “It is clear that more needs to be done.”
Detailing the scale of the problem, the minister said: “We know that 700,000 cases require review, an estimated 230,000 customers will be affected.”
But Lord Younger pointed out more than 173,000 cases had been reviewed and in the region of 46,700 underpayments identified, leading to the refund of more than £300 million in arrears.
He said: “The department became aware of issues with State Pension underpayments in 2020 and the issues go back several decades and through different governments. We have taken immediate action to investigate the extent of the problem and are carrying out highly complex scans of computer systems… This is an important matter and we are moving at pace.”
WASPI women
Labour peer Baroness Ritchie of Downpatrick used the debate as an opportunity to ask Lord Younger about women who were affected by the change in State Pension age. She asked: “What corrective action will be taken to address the needs of the WASPI women [Women Against State Pension Inequality], who have been underpaid for many years and are not entitled to their pensions from the age of 60?”
However, the peer was unable to give any indication and replied: “I am aware, as we all are, of the WASPI issue. The noble Baroness will be aware of the judicial review against the PHSO [Parliamentary and Health Service Ombudsman]. We are aware of it, but I am unable to comment because of the judicial review.”
State Pension underpayment progress - February 2023
Payments made between January 2021 and February 2023 are listed below.
Married (Cat BL)
- Cases reviewed: 82,225
- Underpayments identified: 22,276
- Average arrears: £6,630
- Total amount repaid: £147.7 million
Widowed
- Cases reviewed: 54,150
- Underpayments identified: 9,928
- Average arrears: £11,521
- Total amount repaid: £113.2 million
Over 80
- Cases reviewed: 37,163
- Underpayments identified: 14,512
- Average arrears: £2,710
- Total amount repaid: £39.3 million
Who may be due back payments for State Pension?
There are six particular groups strongly encouraged to contact the pension service to see if they could be entitled to more State Pension.
- Married women whose husband turned 65 before March 17, 2008 and who have never claimed an uplift to the 60% rate
- Widows whose pension was not increased when their husband died
- Widows whose pension is now correct, but who think they may have been underpaid while their late husband was still alive, particularly if he reached the age of 65 after March 17, 2008
- Over-80s who are receiving a basic State Pension of less than £80.45
- Widowers and heirs of married women , where the woman has now died but was underpaid state pension during her lifetime
- Divorced women , particularly those who divorced after retirement, to check that they are benefiting from the contributions of their ex-husband
You can also find full guidance on transferring Basic State Pension payments on GOv.UK here.
How to check if you are affected or make a claim
A phone call to the pension service is the quickest way to find out if you are eligible for a State Pension refund.
The best number to call is 0800 731 0469 but full contact details can be found on the Gov.uk website here.
Earlier this year, a DWP spokesperson said: “The action we are taking now will correct historical underpayments made by successive governments. We are fully committed to addressing these errors, not identified under previous governments, as quickly as possible.
“We have set up a dedicated team and devoted significant resources towards completing this, with further resources being allocated throughout 2023 to ensure pensioners receive the support to which they’re entitled.”
To keep up to date with the latest State Pension news, join our Money Saving Scotland Facebook page here, follow us on Twitter @Record_Money, or subscribe to our newsletter which goes out Monday to Friday - sign up here.
READ NEXT
- Winter Fuel Payments for 2023/24 to open in September
Attendance Allowance claim form tips which could help more people get up to £101 a week
New State Pension pay rates this year could see older people get up to £815 each month
Simple ways to boost State Pension payments as not everyone due full amount this year
Older people making new claims for PIP could be given 10-year payment award
