State pension: DWP estimates 132000 pensioners underpaid due to ‘ongoing control failings’

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The National Audit Office today published the Department for Work & Pensions 2020-21 accounts report, by the Comptroller and Auditor General. The report looked at fraud and error in benefit expenditure, including the UK state pension.

In 2020/21, the Department spent £212.2billion on benefits and state pension payments to claimants and pensioners.

Of this, £100.8billion was spent on the state pension.

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Within the findings, it was confirmed the Department has recognised a new provision of £1billion in its accounts, relating to the underpayment of state pension going back “at least” 30 years.

The DWP estimates 132,000 pensioners have been underpaid due to “continuing process and control failings”, the report said.

READ MORE: State pension age changes force Britons to reconsider plans as retirement ‘fragments’

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“It is the fifth systemic underpayment recognised by the Department in the last three years,” the report said.

The DWP has confirmed it aims to review all relevant cases to “make good” this official error by the end of 2023.

“The impact of this underpayment on the individual pensioners is significant, and it is vital the Department learns lessons to avoid systemic underpayments in the future and correct past underpayments,” the report findings continued.

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Furthermore, it was identified that these errors have primary affected women, and a “small number” of men, who should have received additional state pension derived from their spouse or civil partner’s contributions; widows, and a small number of widowers, who have not received contribution rights inherited from their spouse or civil partner that may increase their entitlement; and individuals over the age of 80 who may be entitled to a minimum basic pension higher than their current payment.

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A DWP spokesperson said: “Our work to correct historical state pension underpayments is complex and as it continues we are developing a fuller picture of the likely costs.

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“We have always said that cost projections were estimates to be refined as the correction activity progresses.

“That’s why we’ve committed to publishing further information at the next fiscal event.

“We are fully committed to addressing the errors as quickly as possible and ensuring that individuals affected receive the state pension they are rightfully due in law.”

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State pension underpayment issues were identified last year, with an analysis finding tens of thousands of older women were being underpaid state pensions.

A research paper published in May 2020 by pension consultants Lane Clark & Peacock (LCP), found many women could actually be entitled to a higher rate of state pension than they were actually receiving.

The matter was something which Baroness Deech, a cross bench member of the House of Lords, discussed this week.

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She said: “Some 200,000 women have been underpaid their state pensions for up to 20 years.

“I might be one of them. I declare an interest as the proud recipient of £6.79 a week.

“Yet there is little movement on the part of the DWP, and I and those others cannot find out.

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“Letters go unanswered and messages say ‘Don’t contact us, we’ll contact you’. How long will it take to achieve repayment?”

Baroness Scott of Bybrook, a Conservative Life peer, replied: “My Lords, the DWP is working extremely hard on making sure that these underpayments are repaid.

“It is putting in a new team of 360 people to work through it, and we hope that all those underpayments will be paid by the end of 2024.

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“We are fully committed to addressing the historical state pension errors and ensuring that the individuals affected receive the state pension they are rightfully due in law.”

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