Tens of thousands of pensioners have died waiting for money owed by the government, warns ex-minister

File photo dated 23/02/14 of pensioners. England's
Underpaid pensioners have so far received £209m out of £1.46bn owed due to an error at the department for work and pensions (DWP). (PA)

Tens of thousands of pensioners may have died while owed money by the government after a catalogue errors over decades left vast numbers of elderly people paid less than they were entitled to, a former work and pensions minister has said.

In 2021, the Department for Work and Pensions (DWP) revealed that 237,000 people, most of whom were women, had been underpaid on their state pension, with the mistakes costing pensioners around £1.46bn in total.

On Tuesday, DWP figures revealed that more than 200,000 pensioners have yet to be compensated.

The data shows that 31,817 state pension underpayments had been rectified between January and October 2021, totalling £209.3m – just 14% of the total.

The hands of an elderly woman in Poole, Dorset.
Former pensions minister Steve Webb said tens of thousands of older people may have died waiting for their full state pension. (PA)

Steve Webb, former minister of state for pensions under the coalition government 2010 - 2015, told Yahoo News UK that many pensioners will have died before receiving their full entitlement as a result.

"Many tens of thousands have died," he said. "So this 237,000 includes tens of thousands who are deceased, and the family get the money. It just gets passed on."

According to a report in January by the public accounts committee, most of those affected are widows, divorcees and women who rely on their husband’s pension contributions for some of their pension entitlement.

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The report added the issues happened largely because of the DWP's use of outdated systems and heavy reliance on manual processing.

The DWP will only contact pensioners when it confirms that they have been underpaid, leaving many in the dark as to whether they could be entitled to more money.

Webb also said it is easier to find out whether a pension has been underpaid once the pensioner has died.

"Bizarrely, the DWP have created a website where you can log the details of your loved one who's died and they will then check eligibility," he said. "For the living, there is no such site."

A view of signage for the Department for Work & Pensions in Westminster, London.
The DWP has said it has set up a "dedicated team" to tackle the issue of state pension underpayments. (PA)

Most underpayments occurred as a result of maladministration.

For example, married women should have received an upgrade to a 60% basic state pension when their husband retired, but many did not. The DWP found the average payment arrears in this group amounted to £6,929 between January and October 2021.

And widowers should have inherited an enhanced state pension when their spouse died - but the DWP found 7,876 underpayments under this category, with repayments so far totalling £84m.

The figures published on by the DWP on Tuesday revealed the department's plan to fix the errors is behind schedule, meaning rectifying the issue could take years.

Webb said civil servants will have to work "systematically" through claims.

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"They'll be going well into 2024, I would think," he said.

"Working their way systematically through.

"However, obviously, if you are on the low pension now and you realise you don't want to wait till 2024."

Responding to Webb's remarks, a DWP spokesperson said: “The action we are taking now will correct historical underpayments made by successive governments.

"We are fully committed to addressing these errors, not identified under previous governments, as quickly as possible.

"We have set up a dedicated team and devoted significant resources towards completing this, with further resources being allocated throughout 2023 to ensure pensioners receive the support to which they’re entitled."

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