A state pension mistake could mean that thousands of older people are entitled to back payments worth up to £10,000. The errors made by the Department for Work and Pensions ( DWP) have been blamed on IT systems and complex rules.
According to the latest figures, which were released in November, a total of 31,817 underpayments were identified between January 2021 and October 2022 - worth £209.3million collectively. It is estimated as many as 237,000 pensioners have been affected by the DWP mistake overall, and that means that around £1.46billion has been underpaid.
The National Audit Office (NAO) blamed the error on “outdated IT systems” and complex rules, according to the Mirror, this led to pension increase claims needing to be made manually rather than automatically. The DWP has admitted some women have not been paid extra state pension payments that they were entitled to.
READ MORE: Year-long study names cheapest supermarket in UK
The issue largely affects women who reached state pension age before April 2016. Three groups of people have been highlighted by the DWP as being affected by the underpayments and it consists of those who retired before 2016. This is because after this date, a woman's pension was no longer linked to their husband's.
Three groups could have been underpaid
The first group include married women who should have received an upgrade to a 60% basic state pension when their husband retired. The DWP said the average payment arrears in this group amounted to £6,929.
The second group is widows who should have inherited an enhanced state pension when their spouse died. The average arrears for this category is £10,772.
The third group include those over the age of 80 who were already in receipt of a state pension when they turned 80, who should have been automatically upgraded to a 60% basic state pension. The average payment arrears in this group amounted to £3,172.
In addition to this, the latest report shows that arrear payments made to affected married women average at around £6,929, for those who are widowed it averages at around £10,772 and for those over 80 at £3,172. In January 2021 the DWP said it had begun an exercise to find the pensioners affected.
However, it has taken more time to begin than planned as the department needed to recruit and train staff for the job. The DWP originally said it expected to complete the entire process by the end of 2023 however, the department now believes that the project could run on “through to late 2024”. This was confirmed in November in a written response from Pensions Minister Laura Trott MP.
What to do if you think you are owed back pay
Those who have been affected will be contacted by the DWP as soon as their case has been evaluated. The pensions department will likely send you a letter confirming how much back pay you are entitled to.
However, if you believe you are owed pension back payments, you should not contact the DWP, but instead should call the Pension Service. This is usually the quickest way to find out if you are eligible for a state pension refund.
The best number to call is 0800 731 0469 but full contact details can be found on the Gov.uk website here.
READ NEXT
