The Department for Work and Pensions (DWP) has confirmed it will publish an updated report into State Pension underpayments before Parliament stops for summer recess on July 21. The DWP is currently in the process of reviewing 405,000 cases as part of a LEAP exercise to identify underpayments, worth more than £1 billion in total, which were due to repeated human errors caused by complex rules and outdated IT systems.
Most of those affected are likely to be women.The previous release, published in March this year, showed that between January 2021 and February 2022 the checking process had identified 14,239 underpayments, worth a total of £94.3m.
When asked about progress at a recent Work and Pensions Committee hearing, the DWP said there are currently 500 people reviewing cases, and it aims to complete the exercise for people over the age of 80, the most vulnerable and those on category BL, by spring next year. DWP also plans to ramp up recruitment to 1,500 to complete the review by the end of December 2023.
Peter Schofield, Permanent Secretary at DWP, also told the Committee that as more reviews are completed, they have identified “additional cases”, however, he explained that this does not include divorced women.
He said: “The difference between divorced people is in all of those circumstances they need to alert us to a change of circumstance.
“The cases that we are looking at through the LEAP exercise are where we should have known and we should have got those right.”
He continued: “I did a sample exercise looking at divorce cases to see if I could see a widespread issue following some reports in the media. I just thought I would have a look at that, but I could not see anything that would suggest that there was anything that needed a LEAP exercise.”
However, he added: “If anyone in any circumstance not covered by the LEAP exercise thinks that there is potentially an issue, they should get in touch with us.”
His comments related to a letter he received last December from Sir Steve Webb, a former Liberal Democrat pensions minister who is now a partner at LCP (Lane Clark & Peacock) - the pension firm which originally identified the mass underpayment.
He highlighted how several underpayments to divorcees had emerged, including some amounting to up to £60,000, and asked the DWP to expand the scope of this exercise to include two further groups where he believed there is “evidence of administrative error”.
These are:
- Women (and some men) who were divorced at pension age but whose pension was not assessed on the basis of their ex-spouse's contributions
- Women (and some men) who divorced post pension age and notified DWP of this fact but where their pension was not reassessed on the basis of their ex-spouse's contributions
State Pension back payments breakdown so far
The following underpayments have been identified between January 11, 2021 and February 28, 2022.
Married (category BL)
- Number of cases reviewed: 38,131
- Underpayments identified: 5,122
- Average amount of back payment: £7,399
- Total amount repaid: £37.9m
Widowed
- Number of cases reviewed: 11,540
- Underpayments identified: 3,626
- Average amount of back payment: £9,506
- Total amount repaid: £33.9m
Over 80 (Cat D)
- Number of cases reviewed: 9,138
- Underpayments identified: 5,491
- Average amount of back payment: £4,104
- Total amount repaid: £22.5m
State Pension underpayments in a nutshell
Under the old State Pension system, married women could claim a basic State Pension at 60% of the full rate based on their husband's contributions, in cases where this would be bigger than the pension they could get based on their own contributions.
Before March 17, 2008, a married woman would need to make a claim to have her state Pension increased - since that date the uplift should have happened automatically.
State Pension is usually paid every four weeks, which means women could have been missing out on up to £321.80 per month.
Who may be due back payments for State Pension?
There are six particular groups strongly encouraged to contact the pension service to see if they could be entitled to more State Pension.
- Married women whose husband turned 65 before March 17, 2008 and who have never claimed an uplift to the 60% rate
- Widows whose pension was not increased when their husband died
- Widows whose pension is now correct, but who think they may have been underpaid while their late husband was still alive, particularly if he reached the age of 65 after March 17, 2008
- Over-80s who are receiving a basic State Pension of less than £80.45
- Widowers and heirs of married women , where the woman has now died but was underpaid state pension during her lifetime
- Divorced women , particularly those who divorced after retirement, to check that they are benefiting from the contributions of their ex-husband
How to check if you are affected or make a claim
A phone call to the pension service is the quickest way to find out if you are eligible for a State Pension refund.
The best number to call is 0800 731 0469 but full contact details can be found on the Gov.uk website here.
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