The Department for Work and Pensions (DWP) has acknowledged a major state pension blunder affecting tens of thousands of pensioners across the UK. Since January 2021, officials have discovered that over 130,000 individuals—mostly women and older pensioners—were underpaid their rightful pension amounts, with total arrears topping an eye-watering £804.7 million.
While some errors date back decades, others were only identified recently through a sweeping DWP-led review aimed at correcting long-standing issues in pension record-keeping and entitlement calculations.
Who Has Been Shortchanged?
The underpayment issue mainly impacts three vulnerable groups:
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Married women who were supposed to receive a higher state pension when their husbands retired but never saw the automatic increase.
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Widowed individuals whose payments weren’t adjusted following the death of their spouse.
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People over 80, many of whom were entitled to a non-contributory state pension that was either missed or miscalculated.
In many cases, these pensioners had no idea they were being underpaid—and tragically, some passed away before the problem was discovered.
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How Much Are People Owed?
Here’s what the DWP has reported as average underpayment amounts:
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Widowed pensioners – £11,725
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Married women (category BL) – £5,553
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Over-80s (category D) – £2,203
Notably, the highest individual cases could amount to £12,000 or more, depending on the length and severity of the error.
The HRP Factor: A Hidden Cause
A key source of these errors involves Home Responsibilities Protection (HRP)—a system designed to protect the pension rights of people who took time out of work to care for children or elderly relatives. Unfortunately, missing or incorrect HRP records have resulted in lower-than-expected pensions for thousands, especially women.
As of late 2024, the DWP’s HRP correction project has identified over 5,300 underpayment cases tied specifically to HRP issues, adding up to £42 million in missed payments.
Industry Voices Call for Accountability
Former pensions minister Sir Steve Webb, who first helped uncover the extent of the problem, has continued to press the DWP for faster and fairer resolutions. He described the scale of underpayments as “alarming,” adding that many of the affected pensioners are among the most financially vulnerable.
“This should never have happened,” said Webb. “It’s unacceptable that people in retirement, especially women, have been shortchanged for years—sometimes decades.”
Financial experts have echoed his concerns. Rachel Vahey of AJ Bell labelled it “one of the most shocking benefit scandals in modern times,” urging the government to expedite payments to all those affected.
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DWP’s Current Action Plan
The DWP says it has resolved the majority of cases but acknowledged that a small number remain outstanding, often due to missing documentation or the need for manual calculations. A department spokesperson assured that every effort is being made to deliver the arrears as quickly and accurately as possible.
To ease concerns, the DWP also confirmed that payments are not taxable and will not affect other benefit entitlements.
What If You’re Affected? Here’s What to Do
If you believe you may be one of the pensioners affected by this error, it’s advised that you:
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Review your pension statement or forecast
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Check your National Insurance contribution history, particularly if you were a carer or part-time worker
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Contact the Pension Service or DWP directly to raise a query
FAQs
❓ Who is most likely to have been underpaid their state pension?
Primarily married women, widowed individuals, and those aged 80+ whose pensions were not properly updated or assessed.
❓ How much could someone be owed?
The DWP reports average underpayments of up to £11,725 for widowed pensioners, but some may be owed even more.
❓ What is the HRP and why is it relevant?
Home Responsibilities Protection (HRP) helps people—especially women—who took time off work for caregiving retain their pension entitlements. Missing HRP records are a key reason for the underpayments.
❓ Have all pensioners been paid back?
Most identified cases have been paid, but some remain under review. If documentation is missing or a person has died, the process may be delayed or go unpaid to the estate.
❓ Will this money affect other benefits or tax status?
No, the DWP confirms that back payments are non-taxable and won’t affect benefit caps or existing payments.
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❓ How do I check if I was underpaid?
Start by reviewing your pension history and contacting the Pension Service. You can also consult an independent financial adviser.
❓ Can family members claim for deceased pensioners?
In some cases, yes. Executors or family members may be able to claim unpaid arrears on behalf of the deceased, though this may require official documents such as a will or probate grant.
Final Thoughts
The revelation of state pension underpayments has stirred serious concern among retirees and advocacy groups alike. While the DWP’s correction campaign is ongoing, it serves as a reminder that even government systems can—and do—make critical errors. If you or a loved one might have been affected, now is the time to take action and claim what’s rightfully yours.