DWP tracks down more half a billion pounds of state pension underpayments, latest count shows

An investigation prompted by This is Money’s Tanya Jefferies and former pensions minister Sir Steve Webb has seen the Government track down more than half a billion pounds worth of state pension underpayments at its latest count.

Today, the Department for Work and Pensions said it had identified £571million in state pension underpayments between 11 January 2021 and 29 February 2024.

This is up by £74million compared to the last count six months ago. 

To date, nearly 100,000 state pension underpayments have been located, with payouts worth around £5,900 each on average, the DWP said. 

While this is a positive start, the DWP has a long way to go. It is estimated that around £1billion in expected total costs are to be reconciled.

For decades, swathes of people, many of whom are widows, were shortchanged, receiving lower sums in state pension payments than they were entitled to. 

The scandal was uncovered by Sir Steve Webb and This is Money’s Tanya Jefferies, after they launched an investigation into a reader question to Sir Steve’s weekly column in early 2020.

Fast forward and for the period from 11 January 2021 and 29 February 2024, the DWP has identified 97,016 underpayments at a total of £571.6million. 

Sir Steve, a partner at LCP, said: ‘There is still a long way to go in paying back all of these missing state pensions. 

‘With an estimated £1billion due to be paid, DWP is barely more than half way through the process, yet only has to the end of this year to meet its deadline. 

‘With underpaid widows being the main outstanding group, efforts must be redoubled to pay all that is due as quickly as possible, in many cases to elderly and vulnerable people.’   

Impact: In 2020, This is Money told the story of Audrey Watson, one of many people caught up in the state pension underpayments scandal

This saga is a long-standing scandal which has hampered the lives of hard-working people all over the UK. Many involved have been struggling unnecessarily for years.

Over the years, Tanya and Sir Steve have campaigned tirelessly to tell the stories of people affected. 

In 2020, This is Money told the story of Audrey Watson, then 81, who received a 12-month backpayment of around £1,500 after being paid too little for 13 years. 

With This is Money involved, Audrey Watson opted to lodge a protest with the Parliamentary Ombudsman in order to pursue the matter further.

In September 2021, the National Audit Office published a 56-page report, which it called: ‘Investigation into the underpayment of State Pension.’ 

The role of Tanya and Sir Steve in bringing the scandal to the attention of authorities was made clear in the 2021 report. 

It said: ‘The errors were brought to the Department’s attention by individual pensioners and third-party reporting. 

‘Most notably Sir Steve Webb, the former Pensions Minister, and Tanya Jefferies of This is Money, provided the Department with example cases of underpayment from January 2020 and published an estimate of the underpayments in May 2020.’

Shockingly, in its 2021 report, the National Audit Office said it was not clear how many pensioners had died while unwittingly being underpaid. It estimated the number could be around 40,000.

This is Money has a detailed guide available for people who are concerned they have been caught up in the state pension underpayments scandal:

>> Women’s underpaid state pensions: Find out if YOU one of the 170,000 affected – and what you should do