Thousands entitled to £8,900 pay out after DWP pension blunders

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Thousands of pensioners are owed £8,900 after underpayments due to repeated human errors, complicated regulations and outdated IT systems, a spending watchdog has ruled.

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The National Audit Office (NAO) said the Department for Work and Pensions (DWP) estimates that it has underpaid 134,000 pensioners and most of them are likely to be women.

The extent of the short payment is not likely to be clear until the DWP has completed further review of all the cases. But for those who can trace it currently, they will be paid an average of £8,900, a total of £1 billion.


Meg Hillier, chair of the Public Accounts Committee, said: “Many pensioners – most of whom are likely to be women – have fallen short of the thousands of pounds they still haven’t received many years later.

“While it is positive that DWP is now working to correct this, this is not the first widespread error in DWP in recent years. Correcting these errors comes at a great cost to the taxpayer.

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“DWP should provide immediate redressal to those affected and take genuine action to prevent similar errors in future.”

An estimated £339 million will go to pensioners who should have benefited from the National Insurance (NI) record of their spouse or civil partner; £568 million to widows and widowers who have inherited a higher state pension entitlement than their deceased partner; and £146 million to pensioners whose pension should have been increased on their 80th birthday.

DWP began exploring the “probability of error” from April 2020 and confirmed that there was a critical issue in August 2020.

The NAO said the errors occurred because state pension rules are complex, the IT systems are outdated and automated, and the administration of claims requires a high level of manual review and understanding by case workers.

“This makes some level of error almost inevitable in the processing of state pension claims,” ​​it added.

The caseworker often fails to set and later-action manual IT systems prompts on pensioners’ files to review payments at a later date, such as when people reach state pension age or their 80th birthday. So it said.

According to the findings, frontline staff found the instructions difficult to use and lacked training on complex matters.

The department has no means of reviewing individual complaints or errors, such as how many people are complaining about similar issues, to assess whether the errors have a systemic cause.

NAO chief Gareth Davis said: “The impact of underpayment of state pensions on those pensioners is significant.

“It is important that the Department for Work and Pensions correct past low payments and implement changes to prevent similar problems in the future.”

A DWP spokesperson said: “We are fully committed to ensuring that historical errors committed by previous governments are corrected, and as this report acknowledges, we dedicate significant resources to doing so.” Anyone affected will be contacted by us to ensure that they receive everything they are owed.

“Since we became aware of this issue, we have introduced new quality control processes and improved training to help ensure this does not happen again.”

PA. Additional reporting by


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