Officials have identified more than £804 million worth of underpayments following an investigation into state pension administrative errors.
The department for work and pensions (DWP) is currently working on a correction scheme after investigations found more than 200,000 people missed out on higher state pension payments dating as far back as 1985.
Errors were uncovered by former pensions minister Steve Webb in 2020 and have been attributed to DWP staff incorrectly recording National Insurance contributions.
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An update from the DWP today (24 April) shows that between 11 January 2021 and 31 March 2025, 130,948 state pension underpayments have been uncovered, owing a total of £804.7m.
That is up from 97,016 underpayments and a total of £571.6m in February 2024, showing that the figure continues to rise.
Rachel Vahey, head of public policy at AJ Bell, said: “This is one of the biggest benefit scandals of modern times. DWP miscalculations have left thousands of pensioners – mainly women – short on their state pension payments.
The Office for Budget Responsibility has previously estimated that the correction exercise could eventually cost the DWP almost £3 billion.
Who are the underpayments affecting?
Most of the errors are from before the new state pension launched in April 2016.
Married women who didn’t get an automatic increase to their state pension when their husband retired under old rules are believed to be one of the main affected groups.
Payouts to this group are currently at £5,553 on average, the DWP said, while a total of £252.8 million has been paid out across 321,439 cases.
It could also affect widowed pensioners from before 2016 who were not entitled to a full basic state pension based on their own contributions but could have inherited payments from their spouse or civil partner.
Average payouts to this group are at £11,725 and £483.4m has been repaid so far after a review of 465,316 cases.
How to check if your state pension payments are correct
The DWP has confirmed to the Work and Pensions Committee that it has completed the vast majority of reviews, but is still waiting for people to contact them with information meaning the exercise won’t be fully completed until March 2027
People should be contacted automatically if they are owed money, but there have been warnings that many married women are not being reached.
While the DWP says it has been trying to locate those who were underpaid, not everyone will get a letter and you may have to contact the DWP yourself for redress.
If this is the case you should contact the Pension Service or use consultancy LCP’s state pension underpayment tool to work out what you could be owed.
Vahey added: “The DWP is calling on customers to provide additional information to put an end to this sad episode. But that relies on these people getting online and engaging with the DWP.
“Once all compensation has been paid, the government needs to undertake a comprehensive review of its processes to ensure these mistakes are never repeated. Trust in pensions is fragile at the best of times and failures such as this will not help. Sadly, it will likely take years, if not decades, to rebuild the confidence lost as a result of this scandal.”
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