New figures released by the Department for Work and Pensions (DWP) has revealed six in every 100 state pensioners are getting underpaid.
The Labour Government is being told to “redouble efforts to track down these errors and fix them” as state pension underpayment rates have increased to six per cent in 2024/25, up from five per cent the previous year,
This rise comes despite the completion of a massive four-year “correction” exercise which has paid out over £800million in arrears to more than 100,000 widows, married women and over 80s.
According to the DWP’s latest figures, around six in every 100 state pension claims are currently being underpaid by the Government.
Older Britons are getting underpaid their state pension
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One of the main sources of underpayments is cases where parents, mostly mothers, are missing credits for time spent at home bringing up children.
The issue particularly affects Child Benefit claims made before the year 2000, when it was not necessary to include a National Insurance number on applications.
This administrative oversight meant that claims were not automatically linked to the National Insurance contributions database to generate credits, leaving many parents without the proper pension entitlements they should have received.
HM Revenue and Customs (HMRC) and the DWP are currently conducting a large-scale correction exercise to address these underpayments.
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DWP minister Liz Kendall is making drastic changes to her department PA Both departments have already written to hundreds of thousands of pensioners who may be missing “Home Responsibilities Protection”.
However, the letters primarily promote online tools to check entitlement and make claims, which may be difficult for many older pensioners to navigate.
The Government’s approach has raised concerns about accessibility for elderly citizens who might struggle with digital services.
New figures on progress with this correction exercise are due to be published next week.
Steve Webb, partner at pension consultants LCP, expressed shock at the findings, saying: “It is astonishing that six in every hundred state pensioners are being underpaid.
“In some cases these underpayments have been going on for years and could amount to thousands of pounds.”
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Former Pensions Minister Steve Webb has slammed the underpayment errors
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He added: “When people have worked hard all of their lives, they have a right to expect that their pension will be paid at the correct rate.
“Given how complex the system is, it can be hard for people to know if they are getting the right amount or not, so it is all the more important that the Government gets it right.”
Webb further criticised the rising error rate despite recent correction exercises, stating: “You would have hoped that all of the recent correction exercises would have resulted in a falling rate of errors, so it is all the more shocking to see underpayment rates increasing.”
The pension expert called for urgent action from the government, saying: “DWP need to redouble their efforts to track down these errors and fix them as a matter of urgency.”
