Pensioners in the UK have been underpaid to the tune of more than £800 million – with some owed almost £12,000, the Department for Work and Pensions (DWP) has revealed. The government department has published an update on its work checking for state pension underpayments, which began in January 2021.
It has now revealed that, between January 11, 2021, and March 31, 2025, 130,948 underpayments were made – with a total of £804.7 million owed. In some cases, people may have received an overpayment of another benefit such as pension credit, the department said.
It also said there may be some cases where the person has died and the DWP has been unable to identify an estate to which to pay arrears.
Those affected by errors include:
- married women on low state pensions whose payments were not automatically increased when their partner retired;
- people whose pension was not automatically reassessed on the death of their spouse;
- over-80s whose state pension entitlements were not automatically increased.
Cases may be checked for more than one potential cause of error, so a claim may be counted in more than one category, the DWP said.
The DWP has said the average underpayments made are:
- Widowed: £11,725;
- Married women (category BL): £5,553;
- Over 80s (category D): £2,203.
Another state pension correction exercise is looking into missing historic periods of Home Responsibilities Protection (HRP), leading to inaccurate state pension payments. Between January 8 and September 30, 2024, the exercise identified 5,344 underpayments, with total arrears of around £42 million.
Sir Steve Webb, a former Liberal Democrat pensions minister who has been unearthing state pension errors, said the amounts paid out under the current HRP exercise are expected to rise sharply as it gathers momentum. A previous HRP correction exercise over a decade ago led to state pension arrears payments of £83 million.
Sir Steve, who is now a partner at consultants LCP (Lane Clark & Peacock), said: “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.”
Rachel Vahey, head of public policy at AJ Bell, said: “This is one of the biggest benefit scandals of modern times. DWP miscalculations have left thousands of pensioners – mainly women – short on their state pension payments. It is absolutely critical all those affected by this scandal receive the money they are owed as quickly and efficiently as possible.”
A DWP spokesperson said: “Our priority is ensuring pensioners receive the dignity and security they deserve in retirement and that state pension underpayment rates remain as low as possible. We have now completed the vast majority of cases in the exercise as planned with a small number of outstanding cases due to further documentation needed from the customer.”
