Thousands of Retirees May Have Been Underpaid State Pension: Expert
A decade-long review process has identified and rectified state pension underpayments affecting hundreds of thousands, but some cases may have been missed.
Tens of thousands of individuals, primarily married women, widows, and those over 80, may have been underpaid their state pension, according to an update from pensions expert Steve Webb. A four-year correction program, launched by the Department for Work and Pensions (DWP) in January 2021, aimed to address these systemic errors. This initiative reviewed nearly three-quarters of a million pension assessments and concluded in early 2025.
During this period, the DWP identified errors in approximately 130,000 cases, resulting in over £800 million in arrears being repaid. The largest number of underpayments, 47,004 cases, involved married women who were entitled to an uplift to 60% of the state pension when their husband retired, but did not receive it. These cases primarily affected those whose husbands retired on or after March 17, 2008. The average arrears for this group were £5,553, totaling £253 million.
A significant number of errors also occurred among widowed individuals, with 50,261 cases identified. In these instances, the state pension should have been reassessed upon the death of a spouse but was not. This group received the largest average arrears, amounting to £11,725, with a total repayment of £483 million. Some extreme arrears payments exceeded £100,000.
Additionally, 33,683 individuals over the age of 80 with modest National Insurance records were found to have missed out on an automatic switch to a higher 'Category D' pension rate. The average arrears for this group were £2,203, totaling £69 million.
While the DWP's correction program is now complete, some individuals may still believe they are owed money. The DWP's policy was not to notify individuals if a review found no error, or if their case was not part of the review. Webb has offered to examine cases where individuals suspect their mother or other relative might have been overlooked.
Home Responsibilities Protection Errors
In a further development, the DWP identified another category of error related to Home Responsibilities Protection (HRP). HRP was designed to boost the National Insurance records of individuals who stayed home to raise children under 16. A process is now underway to identify and compensate those who should have received HRP but did not, as this information is missing from their National Insurance records.
As of March 2025, this HRP correction exercise has led to approximately 12,000 further arrears payments, totaling £104 million. Individuals who believe they may be entitled to HRP can check their eligibility and apply through the relevant government channels. Webb emphasized that individuals do not need to wait for a letter from HMRC and can proactively check their entitlements.
Webb, a former Pensions Minister, has been writing a regular column on pensions for over a decade, highlighting numerous issues and pressuring the DWP to address these underpayments. He thanked readers who brought these problems to light, benefiting over 130,000 retirees.