DWP update for people who were underpaid their State Pension

The Department for Work and Pensions (DWP) has given an important update on progress of State Pension Underpayments Legal Entitlements and Administrative Practice (LEAP) initiative. Most recent figures show 97,016 people above State Pension age - mainly women - have been issued back payments averaging £2,192, £5,713 and £12,486, according to their pension grade.

Fresh figures indicate that between January 11, 2021 and February 29, 2024, 705,688 State Pension cases were reviewed for potential inaccuracies, accumulating to a total of £571.6 million in underpayment dues. This LEAP progress report delivers vital information for four groups of older individuals: married women (category BL), civil partnership participants, widows, and those over 80 (category D).

According to reports, these case assessments were scheduled for completion before the end of 2023 and were "on track" to be rectified by this year-end. Helen Morrissey, head of retirement analysis at Hargreaves Lansdown said progress is being made, albeit 'slowly'.

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Ms Morrissey said: "Progress is being made to rectify the large-scale issue of state pension underpayments, but it is very slow. Just over £571m has been returned so far but with estimates suggesting the scale of underpayments could be around £1.5bn there's still a very long way to go.

"People have the expectation that the state pension they receive is correct but a series of errors in an already overly complicated system means that for many thousands of people this expectation has been incorrect. Some who queried the issue with DWP over the years were told there was no problem, and many have suffered real financial hardship as a result. These people have been let down and need resolution as soon as possible."

In 2020, the Department for Work and Pensions (DWP) identified that certain individuals had not received automatic increases to their State Pension as legally required, prompting an investigation into the scale of the issue, reports the Daily Record. It should be noted, however, that the majority of the 12.7 million State Pension recipients are receiving the correct amount.

The State Pension LEAP (Legal Entitlements and Administrative Practices) exercise is currently reviewing payments for specific groups:

• Category BL (Cat BL) - People who are married or in a civil partnership who reached State Pension age before April 6, 2016 and should be entitled to a Category BL uplift based on their partner’s National Insurance contributions.

• Missed conversions - People who have been widowed and their State Pension was not increased to include any amounts they are entitled to inherit from their late husband, wife or civil partner.

• Category D (Cat D) - People who reach age 80 and who are getting some Basic State Pension but less than the £85.00 (in 2022-23) and may therefore, subject to satisfying the appropriate residency conditions, be entitled to Cat D State Pension of £85.00 a week.

As of February 2024, the progress on the State Pension underpayment review includes the number of cases examined, arrears found, and payments made from January 2021 to February 2024, detailed for the following categories:

Married (Cat BL)

• Cases reviewed: 317,955

• Underpayments identified: 43,367

• Average arrears: £5,713

• Total amount repaid: £243.8 million

Widowed (Cat B)

• Cases reviewed: 298.099

• Underpayments identified: 21,175

• Average arrears: £12,486

• Total amount repaid: £262.3 million

Over 80 (Cat D)

• Cases reviewed: 89,634

• Underpayments identified: 32,474

• Average arrears: £2,192

• Total amount repaid: £65.5 million

Nearly 12.7 million people across Great Britain, including over a million in Scotland, are currently claiming the State Pension. Of this total, 9.3 million are receiving the Basic State Pension and 3.4 million are on the New State Pension. The Basic State Pension now stands at a maximum of £156.20 per week, while the New State Pension can reach up to £221.20.

To quickly determine if you have been underpaid your State Pension, a phone call to the pension service is recommended. The ideal number to dial is 0800 731 0469, but comprehensive contact details can be found on the Gov.uk website here.