Frontline Department for Work and Pensions (DWP) staff have allegedly reverted to making the same pension calculation errors that negatively impact low-income Universal Credit (UC) claimants, even after these issues were supposedly resolved. This Money has reported on multiple cases where individuals are being unfairly denied hundreds or thousands of pounds because their private and work pension contributions are not being correctly factored into their UC assessments.
Payments into private and work pensions are intended to be deducted before UC is calculated, a process designed to encourage retirement savings. While this occurs automatically for those enrolled in workplace pension schemes, reports suggest that some local DWP staff are refusing to accept evidence of private contributions. This practice has been highlighted by This is Money and pensions expert Steve Webb.
One claimant, Richard Spooner, a 48-year-old administrator at a GP's surgery in Cambridgeshire, reported losing £110 per month due to UC errors. After his case was brought to light by Steve Webb in a previous article, the DWP acknowledged the error and stated the issue was resolved, issuing improved guidance to staff. Spooner, however, claims that after an initial period of correct payments, the DWP staff stopped the accurate calculations and have since ignored his communications.
"It seems as soon as This is Money were no longer involved they then reverted back to their bad ways," Spooner stated. He noted that while he initially received links to upload pension statements, these were not acted upon, and eventually, staff stopped responding altogether.
In a separate case, a 65-year-old hotel housekeeper from Birmingham, who has dyslexia and suffers from poor health, also faced similar issues. Despite repeated requests to her JobCentre Plus to consider her pension contributions, her claims were refused, and her work coach blocked her from uploading proof. Following an initial intervention by This is Money and the DWP, her payments were corrected. However, the same mistake recurred the following month.
When both cases were raised with the DWP for a second time, Spooner received £660 in arrears, and the hotel housekeeper was paid £132 in arrears. The DWP stated that additional guidance had been provided to staff.
Steve Webb, a former Pensions Minister and now a partner at LCP, expressed concern over the recurring pattern. "We keep seeing the same pattern repeating itself," Webb said. "People on Universal Credit who are doing what the government wants and making provision for their retirement being told wrongly that their pension contributions are not deductible. But it is even more shocking when cases we have brought to the Department’s attention and been resolved start to go wrong again in a matter of months."
Webb emphasized the need for a system that does not require claimants to be experts in benefit law and for DWP staff to receive consistent and thorough training. He suggested that the number of cases points to a larger problem than the DWP may realize and called for proper checks to identify other affected individuals.
A DWP spokesman acknowledged the corrections in these cases, stating that both customers were contacted directly. The department indicated that private pension contributions of this nature affect a small proportion of UC claimants but that they are continuously reviewing staff guidance to prevent future errors. The DWP advised anyone who believes their UC award is incorrect regarding personal pension contributions to raise the issue through their journal.