State pension underpayments: The people most likely to be owed thousands of pounds
Hundreds of thousands of pensioners are still out of pocket due to government errors dating back as far as the '80s leaving them paid less than they were entitled to.
In 2020, the government admitted it had underpaid huge numbers of state pensions, with the total sum of the errors estimated by the department for work and pensions (DWP) to be £1.46bn.
On Tuesday, the DWP revealed that it had identified and reimbursed a total of £209.3m to 32,000 pensioners – a small fraction of the 237,000 people who received the wrong amount.
The errors have mostly affected widows and older women.
In January, parliament's public accounts committee described the pensions process as "not fit for purpose", blaming out-of-date systems, heavy manual processing, complacency in monitoring errors, and issues with quality assurance.
Chair Labour MP Dame Meg Hillier described the situation as a "shameful shambles".
The DWP has said it is rapidly increasing the number of cases reviewed by hiring new staff - however, experts have warned that the process is already behind schedule and could take until 2024 to resolve.
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There are three main groups who are worst affected by the DWP's errors, here's who they are:
Widows and widowers
Tens of thousands of widows and widowers who should have inherited higher state pension entitlements from their deceased partner did not receive the full amount they should have.
Widows and widowers who are not entitled to the full basic state pension (£141.85 per week) based on their own contributions can inherit one from their spouse up to the full basic state pension rate depending on their partner's contributions record.
They should also see their own state pension reviewed if their husband or wife dies and they reached state pension age before 6 April 2016 - potentially inheriting the basic state pension as well as at least 50% of their additional state pension.
The DWP found 7,876 underpayments under this category between January and October 2021, and repaid £84m.
Parliament's public accounts committee said this had occurred because "rules are complex, have changed significantly over time" warning that it is "only fully understood by a small group of specialists."
Married women
Tens of thousands more married women who should have benefitted from their spouse's national insurance record were not compensated properly.
This applies to women receiving a low basic state pension in their own right, who were entitled to increase it using their living spouse or civil partner’s contributions once their partner retired.
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However, the DWP found the average payment arrears for married women amounted to £6,929 between January and October 2021 - repaying £91.1m.
As is the case for widows, "complex" rules only understood by a "small group of experts" combined with "human error" has created the issue.
Over 80s
Another group who missed out were pensioners receiving no or low amounts of basic state pension who should have had their payouts increased automatically when they reached the age of 80.
Those aged 80 or over can claim a state pension of £85, regardless of their NICs record, provided that they satisfy basic residency criteria.
These people should have been automatically upgraded to a 60% basic state pension.
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However, the DWP found 10,784 cases of underpayment between January and October 2021, and handed back £34.2m.
How do I find out if I'm owed money?
If you want to find out whether you have been underpaid on your pension, you should contact the Pension Service which should provide further information on eligibility and payments.
Widows can also find out if they have been underpaid on by visiting a government website dedicated to the issue.
People accessing the websites may need the following to hand: full name; date of birth; date of death of their partner and their last known address.
A NICs number will also speed up the process, however the department has warned "this may take some time". Once an enquiry is finished, the DWP will respond in writing.
Steve Webb, former pensions minister, told Yahoo News UK on Wednesday tens of thousands may have died waiting for their pension to arrive in full.
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