DWP admits increase in error rates on state pensions – Steve Webb, LCP
Pensions & benefits Personal finance
New figures published show that six in every hundred state pension claims was being underpaid by the Department for Work and Pensions in 2024/25 – up from five in one hundred the previous year. This is despite the completion of a massive four-year-long ‘correction’ exercise which has paid out over £800m in arrears to over 100,000 widows, married women and over 80s.
According to the figures, one of the main sources of underpayments is cases where parents – mostly mothers – are missing credits for time spent at home bringing up children. HMRC and DWP are currently in the middle of a large-scale correction exercise that involves contacting both pensioners and people of working age who may be missing ‘Home Responsibilities Protection’, particularly for Child Benefit claims made before the year 2000. Before this point, it was not necessary to include an NI number on a Child Benefit claim, and this meant that claims were not automatically linked to the NI contributions database to generate credits.
HMRC has already written to hundreds of thousands of pensioners to mention potential HRP, but the letter promoted online tools to check entitlement and to make a claim, which may have been offputting to many older pensioners. New figures on progress with this exercise are due to be published next week.
Commenting, Steve Webb, Partner at LCP, said:
“It is astonishing that six in every hundred state pensioners are being underpaid. In some cases, these underpayments have been going on for years and could amount to thousands of pounds. When people have worked hard all of their lives, they have a right to expect that their pension will be paid at the correct rate. Given how complex the system is, it can be hard for people to know if they are getting the right amount or not, so it is all the more important that the Government gets it right.
You would have hoped that all of the recent correction exercises would have resulted in a falling rate of errors, so it is all the more shocking to see underpayment rates increasing. DWP need to redouble their efforts to track down these errors and fix them as a matter of urgency.”
