THOUSANDS of pensioners are owed money back after errors meant that they’ve been underpaid.
The Department for Work and Pensions (DWP) confirmed that retirees were underpaid by more than £1billion in total.
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And shockingly, some of these underpayments go as far back as 1985.
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.
The news comes after a probe by the Public Accounts Committee (PAC) found that there is still a risk that errors leading to state pension underpayments could happen again.
And a new report released today by the PAC warns that the 237,000 figure could be even greater because the DWP “does not know the full extent of the issue”.
The report said: “Efforts to correct the systemic underpayment of state pension are too slow to meaningfully put things right”, and “will be too little, too late for many affected pensioners”.
Those affected by the error identified by the DWP are pensioners who first claimed the state pension before April 2016.
These pensioners were also unlikely to have a full National Insurance record.
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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to the basic state pension but didn’t due to an error that the National Audit Office has blamed on complex rules and outdated IT systems that require claims to be made manually instead of being automated.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 who have since passed away and their families may never get what they are owed.
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.
This online tool was launched by former pensions minister Steve Webb on behalf of actuarial firm LCP, after he first uncovered cases of women being paid the wrong state pension via his This Is Money column.
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 says 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.
