A probe by the National Audit Office (NAO) has revealed that over £1 billion of State Pension payments have not been paid to pensioners due to mistakes at the Department for Work and Pensions (DWP). According to the NAO, a total of 134,000 pensioners have been underpaid.
Could you be one of those pensioners affected? Here’s how to check.
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Why has State Pension been underpaid and who’s been affected?
The NAO says that outdated computer systems and complex State Pension rules are to blame for the underpayments. These two factors led to human errors when calculating and processing payments.
The errors date back to 1985. Each of the pensioners affected could be owed an average of £8,900, though it could be much more for some. The true value of underpayments will only become clear after the DWP completes a review of all cases.
Most of those affected are likely to be women due to problems with the old State Pension system. Under the old system, women with a low State Pension entitlement should have seen their payments rise to 60% of their husbands’ basic State Pension. In many cases, this did not happen.
The problem only affects only those who reached State Pension age before 2016. The rules changed after 2016, and women’s pensions are no longer linked to those of their husbands.
What do experts think?
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, says that due to the errors and issues at the DWP, “thousands of women have missed out on payments that could have made a real difference to their standard of living in retirement”.
She adds that while the current issue only affects women on the basic State Pension, which was replaced in 2016, it serves as an important reminder to always make sure that you and your loved ones are getting what they are entitled to.
Recent research by Hargreaves Lansdown showed that 16% of those receiving the State Pension rely on it. Another study by myFRP and Censuswide revealed that almost a quarter (23%) of over 55s in the UK will have to rely solely on State Pension payments in retirement as they have no other personal or workplace pension.
Given the possible importance of your State Pension payments, it makes sense to check that your retirement income is correct.
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How can you check if your State Pension was underpaid?
If you suspect you have been receiving less State Pension than you should, the easiest and quickest way to find out is by contacting the Pensions Service. You can contact them online or call them on 0800 731 0469.
Details you’ll probably need to have at hand include:
- Your name, date of birth and National Insurance number.
- Current annual State Pension.
- The name, date of birth (and date of death if this applies) and NI number of your spouse.
- The current basic State Pension your spouse is receiving or what they were receiving before passing away.
The Pension Service will check records and tell you whether you were underpaid.
How can you claim the money you are owed?
The DWP is yet to explain how people can claim the missed payments. However, it says that it expects to make all payments owed by the end of 2023. If you were underpaid, the DWP says that it will contact you to ensure you receive your money.
It’s thought that as many as 40,000 of the women who were underpaid may have already passed away. The DWP has promised to pay out any money owed to their next of kin or another appropriate individual.
