The National Audit Office has just published its investigation into underpayments of State Pension arising from errors made in the calculations at the Department for Work and Pensions (DWP).
The shocking news is that the report estimates that approximately 134,000 pensioners have been underpaid a total of in excess of £1billion. The report attributes the underpayments to a number of reasons, including human error and outdated IT systems.
Tracing State Pension Underpayments
At the moment, the DWP does not have any formal plan of action in place to trace pensioners or the estate of deceased pensioners who may have been underpaid. The problems are exasperated by their confirmation that they normally do not retain records for more than four years after the death of a pensioner or, where the pensioner was married, four years from the date of the death of the surviving spouse.
The figures are, of course, estimates but if the estimated underpayment of £1.053 billion is accurate, then this would represent an average underpayment of just under £9,000 to each of the estimated 134,000 pensioners affected.
It is thought that the pensioners most likely to be affected are women, particularly those who first became entitled to their pension before April 2016.
Therefore, there are two points to take from this:
- If you first claimed your pension prior to April 2016 and, in particular for women, you should carefully check the pension payments that you have received and if you think that an underpayment has been made, then a claim should be lodged with the DWP.
- The families of deceased pensioners should consider whether or not any claim for underpayment should be made. In the case of a claim by executors of the estate, those claims should be made sooner rather than later, bearing in mind the DWP’s admission that they do not keep records indefinitely and that they are likely to be destroyed within four years of the death.