Underpaid state pensioners receive £497m in repayments – are you owed money?

The government has repaid £497m to around 82,323 pensioners who were underpaid their state pension by the Department for Work and Pensions (DWP) due to system errors.However, there's still a long way to go to correct the mistake – the DWP estimates that as many as 170,000 pensioners have been underpaid, with underpayments totalling £1.17bn. 

Here, Which? explains which groups are most likely to have been impacted by the errors and how to check what your state pension is worth.

Why were pensioners underpaid?

Many pensioners have been left short-changed due to a combination of complex rules about entitlements under the old state pension system and computer errors made by the DWP.

The scandal was first brought to light by former pensions minister Steve Webb and pensions consultancy Lane, Clark & Peacock (LCP) in 2020. Their findings prompted an investigation by the DWP, which found there had been a systematic underpayment of state pensions to certain claimants.

The DWP started the correction exercise – known as a Legal Entitlements and Administrative Practices (LEAP) process – in January 2021. 

Find out more: .

Which groups of pensioners were underpaid?

These official errors affect pensioners who started claiming the state pension before April 2016, who do not have a full National Insurance record, or who should have inherited additional entitlement from their deceased partner.

These pensioners come under the following categories:

‘Category B pensioners’‘Widowed pensioners’‘Category D’ pensioners

How much has been paid out so far?

In its latest progress update, published on 30 November, the DWP revealed that it had paid out £497m between 11 January 2021 and 31 October 2023, and after its checking process had identified 82,323 underpayments. 

Here is the breakdown between each category of pensioners:

How long will all repayments take?

The DWP originally said that the LEAP exercise was due to be completed by the end of 2023, however, in its annual report published in July, it said there was a risk that the project could run ‘through to late 2024’. 

 

The government is currently writing to those who fit the criteria and the DWP will recalculate the state pension entitlement for those over state pension age, and let them know if they are due arrears. 

Find out more

How to find out if you're owed money

Where underpayments are identified during the correction process, the DWP will contact you to inform you of the changes to your state pension.

A married woman whose husband claimed his state pension before 17 March 2008

You’re aged over 80 and either not receiving any state pension or are receiving Graduated Retirement Benefit only

You’re divorced and want to know how this exercise affects your state pension.

What if the underpaid person has died?

Their full name

Their date of birth

Their date of death

Their last known address, including their postcode

The full name of their husband, wife or civil partner, if they were married or in a civil partnership.

This applies to those living in England, Wales and Scotland. 

The DWP says that it will help process the application more quickly if you also have the deceased person's National Insurance number.

You may be contacted for further information if the DWP hasn't kept records of the deceased.

If the deceased is owed money, the DWP will write to you with instructions on what to do next. If they're not owed money, the DWP will still write to you and let you know.

If you live in Northern Ireland, you can contact the Pension Centre on 0800 587 0892 and ask to have the records of a deceased person checked. If further information is needed, the Pension Centre will let you know. 

Find out more:.

How much is the state pension worth?

This will rise by 8.5% in the 2024-25 tax year to £221.20 a week.Find out more:.

This article was first published on 5 December 2022 and was last updated on 5 December 2023 following the latest progress update on repayments.

source https://www.which.co.uk/news/article/state-pension-underpayments-are-you-owed-money-aGhBk1E5dteh