TENS of thousands of pensioners have received a total of £300million after being previously underpaid.
Fresh figures released today have revealed that over 46,000 retirees have had payments returned after an error resulted in £1.46bn being underpaid.
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The scale of the error left over 237,000 pensioners underpaid, according to the Department for Work and Pensions (DWP).
The DWP has released the latest figures for its progress in setting things right – but thousands are still owed money back.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown: “DWP is making progress in dealing with state pension underpayments but there’s a mountain still to climb.
“It is clear this is a situation that is not going to be resolved any time soon and in the meantime thousands of pensioners are getting less than what they are entitled to.”
Women retiring under the old state pension system are those mainly affected.
Helen added: “These women have been let down on a gigantic scale and need resolution as soon as possible.”
Of the 173, 538 accounts checked between January 11, 2021 and February 28, 2023, exactly 46,716 underpayments were identified.
This means that £300.1million in state pension underpayments was owed back.
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It included 22,276 married pensioners who received an average of £6,630 each.
More than 14,500 over 80s got an average of £2,710 each.
And a total of 9,928 widowed retirees were paid out an average of £11,521 per case.
Shockingly, some of the underpayments go as far back as 1985.
Those affected by the error are pensioners who first claimed the state pension before April 2016.
These retirees were unlikely to have a full National Insurance record.
They should have received increases to the basic state pension but didn’t due to an error that the National Audit Office has blamed on complex rules and outdated IT systems that require claims to be made manually instead of being automated.
But some have since passed away and their families may never get what they are owed.
The DWP has been contacting those affected by the errors, mostly women who are widowed, divorced or who have some of their entitlement based on their husband’s pension contributions.
But many people could still be missing out on significant sums because there is little guidance for those concerned they are being underpaid their state pension.
Who is affected by state pension underpayments?
Around 237,000 retired stay-at-home mums may have missed out on a pension hike when their husbands retired.
Their payments should have risen to 60% of their husband’s basic state pension, the amount women with low National Insurance contributions got under the old pension system.
In the previous tax year when the issue was first uncovered, they would get £80.45 a week, 60% of their husband’s £134.25 a week.
Instead, they are getting more like £67 a week.
The injustice only affects wives who retired before 2016. After this date, women’s pensions were no longer linked to their husbands.
How much you’ll get in compensation depends on when your husband retired.
If it was between April 2008 and 2016, you’ll get all your losses back as the Government should have increased your pension automatically.
Those whose husbands retired before 2008 had to apply for the extra cash, although in many cases they lost out because they didn’t know about it.
Women in this position can only get a year of backdated payments.
What can I do about it?
Pensioners can’t go directly to the DWP and query whether they have been affected but there are some online tools and advice sites out there to help give you some clues.
An online tool launched by former pensions minister Steve Webb on behalf of actuarial firm LCP can help married women check if they might be affected.
If you use the LCP calculator and think you’re eligible for a top-up in either scenario, then the DWP should pick up the error in their own records too.
The DWP started working to fix the problem on January 11, 2021, and said that it expects to make repayments by the end of 2023.
If you are owed money, you’ll likely have to sit tight and wait for the DWP to send you a letter confirming your payment.
Those considered at “high risk” like those over 80 and widows are being prioritised.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
