Underpayment

Women’s pensions shortfall ‘a shameful shambles’

DWP pension
The Department has promised to correct mistakes

Thousands of women have been denied their full pension entitlement because of government errors dating back to 1985, according to a committee of MPs.

The mistakes by the Department for Work and Pensions left more than 134,000 pensioners out of pocket. The total under payment could amount to £1 billion.

MPs on the Public Accounts Committee said the problem relates to the “old” state pension system where married women who had a small pension in their own right could claim a 60% basic state pension based on their husband’s record of contributions.

Widows and divorcees have also been affected. Some will receive all their entitlement, although years later than they should have done. Others will only be able to claim for 12 months of missed payments.

The errors were the result of outdated systems and heavily manual processing of pensions at the DWP.  While some errors were quite small they added up to significant sums of money.

By allocating staff to deal with this problem, there were concerns that backlogs occurred from dealing with claims from new pensioners who suffered a change the state pension age to 66.

The committee’s report stated that the pension payment system “is not fit for purpose”, and set out a series of recommendations.

The problem first emerged last September and the committee decided to investigate the issue. It found the underpayments were as much as £128,000.

Meg Hillier, who chairs the committee, said: “For decades DWP has relied on a state pension payment system that is clunky and required staff to check many databases – and now some pensioners and the taxpayer are paying in spades.  

“In reality, the DWP can never make up what people have actually lost, over decades, and in many cases it’s not even trying.  This is a shameful shambles.”

Former pensions minister Sir Steve Webb, who is now a partner at consultancy LCP, first raised concerns about underpayments.

“The DWP’s defensive reaction to questions and scrutiny over this issue suggest that lessons have still not been learned,” he said. 

Steve Webb
Steve Webb: raised concerns

“There are still far too many people missing out on the state pension to which they are entitled and DWP needs to track them all down as a matter of urgency.”

Asked why the problem was not spotted while he was pensions minister between 2010 and 2015, he said: “It is a question I have asked myself plenty of times.

“On becoming a minister you make assumptions, one being that they are paying the right pensions to people. It never occurred to me that they were underpaying, particularly on this scale, so I take my share of responsibility for that.”

A DWP spokesman said: “Resolving the historical state pension underpayments that have been made by successive governments is a priority for the department and we are committed to doing so as quickly as possible.

“We have set up a dedicated team and devoted significant resources to processing outstanding cases, and have introduced new quality control processes and improved training to help ensure this does not happen again. Those affected will be contacted by us to ensure they receive all that they are owed.”



4 Comments to Women’s pensions shortfall ‘a shameful shambles’

  1. I am a widow. Do i qualify for a rebate on my late husbands contributions. Date of marriage 15.07.1961. Husbands date of death 19.12.2020.

  2. HOW DO I FIND OUT HOW MY PENSION IS MADE UP, I HAVE BEEN DIVORCED FOR OVER 30 YEARS AND DO NOT KNOW IF I GET ANYTHING FROM DWP FROM MY EX HUSBAND PENSION.

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