Pensioners to get thousands after 'human errors' lead to £1bn underpayment

22 September 2021, 07:59

Eligible pensioners will get an average of £8,900
Eligible pensioners will get an average of £8,900. Picture: Alamy

By Will Taylor

Pensioners have been "short changed" after repeat human errors led to more than £1 billion-worth of underpayments.

It is thought 134,000 people had their state pension paid at a lower amount than it should have been – and those who can be traced will get an average of £8,900, the National Audit Office (NAO) said.

Most of the people affected are likely to be women but the true value of how much was underpaid will not be known until the Department for Work and Pensions (DWP) has reviewed all cases.

Meg Hillier MP, chair of the House of Commons' Committee of Public Accounts, said: "Many pensioners - most of whom are likely to be women - have been short-changed by thousands of pounds which they are still yet to receive many years later.

"Although it is positive that DWP is now working to put this right, this is not the first widespread error we have seen in DWP in recent years. Correcting these errors comes at great cost to the taxpayer.

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"DWP must provide urgent redress to those affected and take real action to prevent similar errors in future."

Around £339m is set to go to pensioners who should have benefited from their spouse or civil partner's national insurance record, £568m to widows and widowers who should have inherited more state pension entitlement, and £146m for those who were supposed to get an increase on their 80th birthday.

Human errors have been blamed. It affects people who first claimed state pension before April 2016, who don't have a full national insurance record, and those who should have seen certain increases in their basic state pension.

The issue was brought to the DWP's attention by pensioners, experts and the media.

The errors happened because state pension rules are complex, the IT systems are outdated and not automated and claims are handled with a high degree of manual review by case workers, meaning mistakes can occur, the NAO said.

Caseworkers often failed to use manual IT system prompts to review pensioners' files at a later date, such as their 80th birthday, and frontline staff found instructions difficult to use and lacked training for dealing with complex cases.

Gareth Davies, the head of the NAO, said: "The impact of the underpayment of state pension on those pensioners affected is significant.

"It is vital that the Department for Work and Pensions corrects past underpayments and implements changes to prevent similar problems in future."

A DWP spokesperson said: "We are fully committed to ensuring the historical errors that have been made by successive governments are corrected, and as this report acknowledges, we're dedicating significant resource to doing so.

"Anyone impacted will be contacted by us to ensure they receive all that they are owed.

"Since we became aware of this issue, we have introduced new quality control processes and improved training to help ensure this does not happen again."