The Department for Work and Pensions (DWP) has revealed a major issue that has affected over 130,000 UK pensioners, involving £804.7 million in state pension underpayments. Many retirees—especially married women, widows, and those over 80—have been short-changed due to administrative failings and outdated pension rules.
This large-scale error underscores systemic flaws that have left some individuals underpaid by as much as £12,000, often over decades. While many cases are now resolved, thousands remain under review, and pensioners are being strongly encouraged to check their records.
Who Was Affected by the Underpayments?
The DWP review, ongoing since January 2021, has uncovered underpayments mostly among three specific groups:
1. Married Women (Category BL)
Women who were entitled to 60% of their husband’s basic state pension once he reached retirement age, but were never upgraded automatically.
2. Widowed Pensioners
When a spouse dies, the surviving partner is often eligible to inherit part of their pension, but many cases were never reassessed, resulting in years of lower payments.
3. Pensioners Over 80 (Category D)
Individuals who reached 80 and qualified for a higher state pension under UK law but never received the appropriate uplift.
In some instances, individuals fell into multiple categories, further compounding the underpayment issue.
How Much Could You Be Owed?
Below is a breakdown of the average arrears identified by the DWP so far:
| Group | Average Underpayment |
|---|---|
| Widowed Pensioners | £11,725 |
| Married Women (Category BL) | £5,553 |
| Over 80s (Category D) | £2,203 |
In addition, a separate review involving Home Responsibilities Protection (HRP)—designed to safeguard pensions for carers and parents—has found 5,344 affected individuals, with a total correction value of £42 million as of September 2024.
Why Did This Happen?
The causes of underpayment are rooted in a combination of:
- Administrative errors (manual updates that were never applied)
- System limitations in detecting changes after events such as bereavement
- Lack of awareness among pensioners about their entitlement to automatic increases
In many cases, the DWP failed to act when significant life events—like the death of a spouse—should have triggered a pension reassessment.
Can Deceased Pensioners’ Estates Claim Compensation?
Unfortunately, in numerous instances, affected individuals passed away before the error was detected, and not all estates will be able to recover lost payments. This has further intensified criticism from advocacy groups and financial experts.
Calls for Accountability and Reform
Former pensions minister Sir Steve Webb, who helped bring the issue to light, called it “one of the largest benefit administration failures in living memory.” He continues to press for faster payments and greater transparency from the DWP.
Financial expert Rachel Vahey from AJ Bell echoed these concerns, calling for urgent prioritisation of affected pensioners and describing it as “one of the biggest benefit scandals in recent history.”
DWP Response
A DWP spokesperson acknowledged the severity of the situation, stating:
“We are fully committed to correcting these errors and ensuring every pensioner receives what they are entitled to.”
Advertisement
According to the department:
- Most cases have been resolved
- Some remain under review, primarily due to missing records or complex case histories
What Should You Do If You Think You’ve Been Underpaid?
If you believe you—or a deceased relative—might have been underpaid, take the following steps:
Step-by-Step Guide
- Check Your Pension Category
- Are you a married woman (especially if your husband received a pension before you)?
- Did your spouse die and your pension remained unchanged?
- Did you turn 80 and not receive a boost in payments?
- Review Your State Pension Record
Visit the Gov.uk website or check your latest pension statements. - Contact the DWP Pension Service
- Phone: 0800 731 0469
- Website: www.gov.uk/contact-pension-service
- Gather Documentation
- Marriage certificate
- Spouse’s death certificate
- National Insurance number
- Past pension statements (if available)
- Seek Help from Charities or Advisors
Organisations like Age UK, Citizens Advice, and Pension Wise can help you understand your rights and assist with the claims process.
