Full list of older women due State Pension back payments of up to £12,400
The Department for Work and Pensions (DWP) recently published updates on the progress of the State Pension Underpayments Legal Entitlements and Administrative Practice (LEAP) exercise and the Home Responsibilities Protection (HRP) corrections exercise.
However, former pensions minister Sir Steve Webb, who is now a partner at LCP (Lane Clark and Peacock) announced last month that there is evidence to suggest that a new group of people may have errors on their State Pension which could result in annual underpayments of around £2,000.
The former Lib Dem MP said people claiming the New State Pension, who were already widowed when they retired, may have been underpaid and due a back payment. This is a bit complicated and relates to inherited State Pension, however, to make it easier for people to check how much they should be receiving, LCP has developed an online tool which you can use here.
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A tool previously launched by LCP to help married women check for underpayments had over one million visits.
Sir Steve said: “Having had to spend years checking hundreds of thousands of historic State Pension calculations for errors, you would hope that DWP would be making sure that new claims are handled correctly. But we have found worrying evidence that this is not the case.
“There seems to be a particular problem for people who are widows or widowers when they claim their State Pension. In some cases DWP seems to have failed to automatically add any inherited State Pension they were due from a late partner. These cases may well be the tip of an iceberg.”
Sir Steve added: “The Department needs to launch an urgent investigation into the scale of this problem.”
Who might be affected by the new underpayments?
In general, the new group appears to include those who are widows or widowers at the point when they claim their New State Pension and where either the spouse who has died reached pension age before April 6, 2016 or where they died before April 6 2016, Sir Steve said.
The exact amount of inherited State Pension depends on individual circumstances, but could be higher if the late spouse was an employee, rather than self-employed and the widowed spouse is not receiving a widow’s pension from a company pension scheme (as this may replace part of any inherited State Pension due).
State Pension underpayments progress
Up to March 31, 2024, the DWP has paid arrears of £1.12 billion through the LEAP exercise and £2.2 million through the HRP corrections exercise.
The latest DWP figures show that between January 11, 2021 and March 31, 2024 some 99,558 people over State Pension age - mostly women - have received back payments averaging £2,196, £5,693 and £12,423, depending on their pension category as part of the LEAP exercise.
This includes married women and people in a civil partnership (category BL), widows and those over 80 (category D). The DWP also confirmed that categories BL and D case reviews were completed by the end of 2023, with corrections and backdated payments due to be made before the end of this year.
Current estimates of the total arrears due through the LEAP exercise is £970 million to 133,000 pensioners and recognised a provision of £369 million, reflecting the outstanding amounts it still expects to repay.
Last year it was estimated that DWP underpaid £1.17 billion to 170,000 pensioners, the final total value of the underpayments will only be confirmed by the completion of the exercise.
DWP estimates that the number of people impacted by missing HRP State Pension arrears is around 194,000. Between January 8, 2024 and the end of March 2024, HMRC has corrected records which has led to the identification of 274 underpayments, with payments made totalling around £2.2 million.
Below is an overview of the State Pension underpayment progress including the average arrears amounts.
State Pension Underpayments - LEAP exercise
The State Pension LEAP is the DWP’s largest underpayment correction exercise in progress. It has been established to identify where State Pension underpayments may have occurred in respect of the following groups of people:
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 £101.55 a week (2024/25 weekly rate).
State Pension underpayment progress - March 2024
The number of cases reviewed, arrears identified and payments made between January 2021 and March 2024 are listed below.
Married (Cat BL)
Cases reviewed: 318,693
Underpayments identified: 43,825
Average arrears payment: £5,693
Total amount repaid: £245,535,772
Widowed (Cat B)
Cases reviewed: 323,075
Underpayments identified: 22,964
Average arrears payment: £12,423
Total amount repaid: £281,796,561
Over 80 (Cat D)
Cases reviewed: 89,949
Underpayments identified: 32,769
Average arrears payment: £2,196
Total amount repaid: £66,693,817
State Pension underpayments - Home Responsibilities Protection
The DWP estimates it underpaid between £300 million and £1.5 billion of State Pension because of errors with the recording of HRP.
HMRC started writing to thousands of older people in September 2023 who may have been underpaid their State Pension due to missing information on their National Insurance (NI) record. The issue affects mostly women in their 60s and 70s who may have HRP missing from their NI record.
HRP was a scheme designed to help protect parents’ and carers’ entitlement to the State Pension and was replaced by NI credits from April 6, 2010. HMRC is using NI records to identify as many people as possible who might have been entitled to HRP between 1978 and 2010 and have no HRP on their NI record.
After May 2000, it became mandatory to include a NI number on claims so people claiming after this point will not have been affected. It is estimated tens of thousands of people are due an average of £5,000 in back payments.
HRP underpayments - March 2024
Cases reviewed: 419 of 194,000
Total amount repaid: £2.2m
Personal representatives are able to claim on behalf of deceased customers. For more information on eligibility and how to claim, visit the dedicated HRP page on GOV.UK here.
State Pension National Insurance Credits
Some people who received Universal Credit may not have had their National Insurance Credits correctly attributed to their National Insurance record held by HMRC which could affect their State Pension.
National Insurance records are maintained by HMRC based on information from employers through PAYE, Self-Assessment tax returns from the self-employed and information provided by DWP on benefit receipt where that creates a National Insurance credit.
Between 2017-18 and 2022-23 information about Universal Credit entitlements could not be processed by the National Insurance Recording System. National Insurance credits can affect the value of a State Pension award, so there was a risk some people who had claimed Universal Credit and subsequently reached State Pension age may have been underpaid.
During this period the DWP put in place a manual system with HMRC to update an individual’s National Insurance record where they felt they qualified for National Insurance credits in respect of time on Universal Credit.
With the issues now resolved between the DWP and HMRC systems, claims data relating to the affected years can now be successfully processed by HMRC. When these records are updated information will be sent to the DWP who will then correct any State Pension awards that are affected.
How to check if you are affected or make a claim
There are nearly 12.7 million people across Great Britain claiming State Pension, including more than one million in Scotland. Of that overall total, 9.7 million are in receipt of the Basic State Pension and 2.9 million on the New State Pension.
The Basic State Pension is worth up to £169.50 each week and the New State Pension up to £221.20.
A phone call to the Pension Service is the quickest way to find out if you have been underpaid your State Pension. The best number to call is 0800 731 0469, lines are open 8am to 6pm Monday to Friday - full contact details can be found on the GOV.UK website here.