Personal Finance

Are you owed £6,000? Thousands owed state pension back payments

"Truly shocking" errors have caused state pension underpayments to reach a record high of £670 million.

The Department for Work and Pensions underpaid the amount in the 2022/23 financial year, up from £540m in underpayments the previous year.

In the majority of cases officials had failed to take action when a recipient's marital status changed or age hit a trigger point, the DWP said in its latest update.

Incorrect inputting of a claimant's national insurance contributions was the second biggest reason for underpayments.

In other cases, £100m was actually overpaid last year.

It's estimated 237,000 people have been underpaid £1.46 billion, meaning each victim could be entitled to just over £6,000.

Steve Webb, of pension consultants LCP told the Financial Times "urgent action" was needed. He said: “The continuing scale of state pension underpayment is truly shocking. Whilst it is right that there is a focus on fraud in the benefit system, DWP should be equally concerned where it is not paying people what they are entitled to."

The errors largely relate to historic cases of women who retired under the old state pension system and whose payments are linked to their husband's national insurance records.

Under the old system women could receive 60 percent of the full basic state pension based on their husband's national insurance contributions, should this be more than they would have ordinarily received on their own contributions.

The uplift should have been applied automatically since March 17 2008 but before then women had to make a claim to have their pension increased when her husband turned 65. Investigations uncovered other errors and DWP has been playing catch up since 2021.

The main categories of people affected are:

  • People widowed who are entitled to inherit a state pension uplift from their late spouse or civil partner.
  • People married or in a civil partnership who reached state pension age before April 6 2016 and may be entitled to a pension uplift based on their spouse of civil partner's national insurance contributions.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown said: “DWP is making progress in dealing with state pension underpayments but there’s a mountain still to climb.

‌“So far almost 47,000 underpayments have been identified with £300million being repaid.

“However, with estimates suggesting as many as 237,000 pensioners have been underpaid £1.46billion, it is clear this is a situation that is not going to be resolved any time soon and in the meantime thousands of pensioners are getting less than what they are entitled to.”

A DWP spokesperson said: “Our priority is ensuring pensioners receive the financial support to which they are entitled, and state pension underpayment rates due to official error remain low at 0.5 per cent of expenditure. "Where errors do occur, we are committed to fixing them as quickly as possible.”

How to check if you're entitled to state pension backpayments

If you're worried you may have been underpaid your state pension you can call the state pension service on 0800 731 0469.

Days to qualify for £301 cost of living payment

Pensioners have been urged to check if they are eligible for Pension Credit, which could see them receive the £301 cost of living payment.

Pension Credit is worth more than £3,500 a year in benefits and tax breaks.

Those who claim by May 19 can also receive the £301 cost of living payment. The payment is the first of three to be made to lower-income households over the next year.

Pension Credit can be backdated up to three months so long as they were eligible to receive it during that time too. And that means they will also gain access to the cost of living payment.

Pension Credit supports those over state pension age on a low income. It tops up a person's income to a minimum of £201.05 a week for single pensioners and £306.85 for couples. If a person has a disability or caring responsibility the benefit is even more.

Pension Credit also gives access to other help such as discounts on council tax and heating.

To apply for Pension Credit or see if you're eligible, call 0800 99 1234 or visit the Government's Pension Credit: How to Claim page.

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Helen Barnett

Helen is a journalist, editor and copywriter with 15 years' experience writing across print and digital publications. She previously edited the Daily Express website and has won awards as a reporter. Read more here.


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