Underpayments of state pensions have reached record levels and affected 6% of all new claims in the last financial year.
Figures from the Department for Work and Pensions’ (DWP) reveal that the total amount underpaid in 2022-23 was £670m – the highest on record, the government admits. This compares with £540m underpaid the previous year. The DWP also says that six in every 100 new state pension claims were underpaid in 2022-23.
The main categories for underpayment include married women on low pensions who did not receive an automatic increase when their husbands retired, or who did not get their pensions reassessed after their husbands died. The DWP also admits to errors in recording credits for time at home with children, known previously as Home Responsibilities Protection.
Consultancy LCP noted that underpayments were more than six times higher than overpayments, which totalled £100m in 2022-23.
“The continuing scale of state pension underpayment is truly shocking,” said LCP partner Steve Webb. “While it is right that there is a focus on fraud in the benefit system, the DWP should be equally concerned where it is not paying people what they are entitled to.
“What is particularly alarming is that these errors are not just historic problems, with six in 100 new pension claims being underpaid. Urgent action is needed to drive up standards of administration so that pensioners can have confidence that the pension they are being paid is correct.”
