Personal Finance

The state pension underpayments totaling £804 million have been identified by the government Do you owe money?

The state pension underpayments totaling £804 million have been identified by the government Do you owe money?
We have the most recent information about the government's investigation into state pensions that were underpaid due to administrative mistakes

After looking into administrative errors in state pensions, officials found underpayments totaling more than 804 million.

After investigations revealed that over 200,000 people were not receiving higher state pension payments going back to 1985, the Department for Work and Pensions (DWP) is currently developing a corrective plan.

In 2020, former pensions minister Steve Webb discovered errors that were ascribed to DWP employees recording National Insurance contributions incorrectly.

Today, April 24, the DWP released an update indicating that 130,948 state pension underpayments totaling 804 point 7 million were discovered between January 11, 2021, and March 31, 2025.

The number is still increasing, as evidenced by the fact that it is higher than the 97,016 underpayments and 571.6m total in February 2024.

AJ Bell's head of public policy, Rachel Vahey, stated: "This is one of the largest benefit scandals in modern history. Numerous pensioners, mostly women, are now short on their state pension payments due to DWP errors.

According to earlier estimates by the Office for Budget Responsibility, the DWP may ultimately have to pay nearly 3 billion dollars for the correction exercise.

Who is affected by the underpayments?

The majority of the mistakes date back to before the April 2016 implementation of the new state pension.

One of the primary groups impacted is thought to be married women who, under previous regulations, did not automatically receive an increase in their state pension when their husbands retired.

According to the DWP, payouts to this group are currently averaging 5,553 per year, with a total of 252 point 8 million disbursed across 321,439 cases.

Widowed pensioners from prior to 2016 who may have inherited payments from their spouse or civil partner but were not eligible for a full basic state pension based on their own contributions may also be impacted.

After reviewing 465,316 cases, the average payouts to this group are 11,725 and 483.4m have been reimbursed thus far.

How to verify the accuracy of your state pension benefits.

The DWP has assured the Work and Pensions Committee that it has finished the great majority of reviews; however, the exercise won't be finished until March 2027 because they are still awaiting information from individuals.

If someone is owed money, they should be contacted automatically, but there have been concerns that many married women are not getting in touch.

You might need to get in touch with the DWP directly to seek redress, even though the agency claims to have been working to identify those who were underpaid.

To find out how much you might be owed, you should get in touch with the Pension Service or use the state pension underpayment tool provided by consultancy LCP.

"To end this sad episode, the DWP is calling on customers to provide additional information," Vahey continued. However, that depends on these individuals connecting to the DWP online.

"To make sure that these errors are never made again, the government must conduct a thorough review of its procedures after all compensation has been paid. Even in good times, pension trust is brittle, and malfunctions like this one won't help. Unfortunately, restoring the trust that was damaged by this scandal is probably going to take years, if not decades.