The Department for Work and Pensions (DWP) has issued a statement after new analysis revealed that over a million pensioners were underpaid last year.
Processing errors meant that 10.7% of all State Pension cases were underpaid, with around 1.3 million pensioners affected by the mistakes. People on State Pension were underpaid a total of £530 million last year, averaging more than £400 per person, amid the cost of living crisis.
The figures were unearthed in official Government documents about fraud and error in the benefits system, which said that mistakes made by government officials cost benefits and state pension claimants £1.1 billion in the 2021-22 financial year. The Express reported that the significant underpayments were discovered because the Government is now actively carrying out checks, rather than using estimates, suggesting that underpayments could have been much higher in previous years.
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The data also revealed that £140 million was underpaid to Universal Credit claimants in the same period, while those on Employment and Support Allowance were left £130,000 short. Around 1.8 million people were affected by underpayments overall.
Former pensions minister Sir Steve Webb said of the figures: "It's an extraordinary amount of money to miss out, especially during a cost of living crisis. It is all the more shocking that proper checks have not been done for more than 15 years.
"These figures are the first year that checks have been done properly - they've actually been phoning people up - and unsurprisingly the underpayments are very high."
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, also hit out at the mistakes. "When people claim benefits there is an expectation they will be paid the correct amount," she said.
"Even though underpayments due to official error looks low in percentage terms the reality is that it amounts to a huge amount of money that is not being sent to people who sorely need it. The issue of state pension underpayments has been reported widely in the press, with the National Audit Office estimating well over 100,000 people, primarily women, not receiving what they are due.
"The Government is in the midst of identifying and repaying those affected but the reality is this is going to take some time and many people have struggled financially as a result. The benefits system is hugely complex and difficult to navigate. It is to be hoped Government learns lessons from the State Pension issue to ensure underpayments throughout the benefits system are identified and remedied more quickly."
A spokesperson for the Department for Work and Pensions said: "State Pension underpayment rates remain low at 0.5 percent of expenditure.
"In 2021/22 we spent over £104 billion and in 2022/23 we were forecast to spend over £110 billion on the State Pension, supporting over 12.5 million pensioners. Our priority is ensuring everyone receives the financial support to which they are entitled and, where errors do occur, we are committed to fixing them as quickly as possible."
It comes after separate DWP figures last month revealed that tens of thousands of state pensioners have received a total of £300 million after being underpaid. Of the 173,538 accounts checked between January 11, 2021 and February 28, 2023, exactly 46,716 underpayments were identified - equating to around £6,420 on average per case.
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