The Department for Work and Pensions (DWP) has identified and corrected significant underpayments in State Pensions over the last three years. Here’s everything you need to know about these errors, the groups affected, and how to check if you’re eligible for back payments.
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DWP’s State Pension Underpayment Correction: An Overview
Since 2020, the DWP has uncovered widespread underpayments in State Pensions, impacting over 119,050 pensioners. These individuals have received back payments averaging £11,905, with some receiving significantly more depending on their circumstances.
This effort, known as the State Pension Underpayments (LEAP) exercise, is the largest correction initiative undertaken by the DWP to date.
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Groups Affected by State Pension Underpayments
The DWP has identified three main categories of pensioners who were underpaid:
1. Married Individuals and Civil Partners (Category BL)
- Who is affected? Married people or civil partners who reached State Pension age before April 6, 2016, and are entitled to a Category BL uplift based on their partner’s National Insurance contributions.
- Findings:
- 45,907 underpayments identified from 321,142 cases reviewed.
- Average back payment: £5,591.
2. Widowed Individuals
- Who is affected? Those who were widowed but did not have their State Pension increased to include amounts they were entitled to inherit from their late spouse or partner.
- Findings:
- 39,706 underpayments identified from 445,188 reviewed cases.
- Highest average back payment: £11,905.
3. People Over 80 Years Old (Category D)
- Who is affected? Pensioners over 80 receiving some Basic State Pension but less than the minimum £85.00 (2022-23 rate). They may qualify for the £101.55 weekly rate (2024-25 rate).
- Findings:
- 33,437 underpayments identified from 90,720 reviewed cases.
- Average back payment: £2,202.
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Additional Errors Identified: HRP and Universal Credit Cases
Home Responsibilities Protection (HRP) Cases
- Issue: Errors in recording HRP on National Insurance (NI) records between 1978 and 2010.
- Impact:
- HMRC estimates underpayments totaling between £300 million and £1.5 billion.
- Average arrears: £7,859 per case.
- Over 370,000 letters sent to potentially affected individuals, primarily women in their 60s and 70s.
Universal Credit and Missing NI Credits
- Issue: National Insurance credits for people claiming Universal Credit between 2017-18 and 2022-23 were not updated due to system errors.
- Solution:
- The DWP implemented a manual system to correct records.
- System issues have since been resolved, allowing accurate claims data processing.
How to Check If You’re Owed Back Payments
If you suspect you may be affected by these underpayment issues, the quickest way to confirm is by contacting the Pension Service:
- Phone: 0800 731 0469
- Availability: Monday to Friday, 8am to 6pm.
The DWP encourages affected individuals to come forward, especially those within the identified groups. By checking your entitlement, you could receive a substantial back payment and ensure your pension reflects what you’re owed.
Progress on the Correction Exercise
The DWP has made significant strides:
- Correction exercises for married women, civil partners, and those over 80 years old are complete.
- Progress for widowed cases is on track to conclude before the new year.
- HMRC continues reviewing NI records for HRP errors and Universal Credit claimants.
Conclusion: Act Now to Secure Your Entitlements
This initiative highlights systemic issues in pension management that affected thousands. While significant corrections have been made, many may still be unaware of their entitlements. If you fall into one of the identified categories, take action today to ensure you receive the payments you deserve.
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