The Department for Work and Pensions (DWP) has uncovered a shocking state pension underpayment issue, with over £800 million owed to pensioners across the UK.

Some individuals could be entitled to as much as £12,000 in back payments, with the DWP taking action to correct errors dating back years. But who exactly is affected by these underpayments, and how can pensioners claim the money they are owed?

This article will dive into the details of the DWP’s investigation, the causes of underpayments, and what pensioners can expect to receive.

A Shocking £800 Million Shortfall

The DWP’s investigation into state pension underpayments, which began in January 2021, has revealed that pensioners have been underpaid by a staggering £804.7 million.

According to the department’s most recent update, 130,948 cases have been identified where pensioners were paid less than they were entitled to between January 11, 2021, and March 31, 2025. This amount includes some people who have received overpayments from other benefits, such as pension credit.

In some tragic cases, the DWP was unable to identify an estate to pay the arrears after the pensioner had passed away, further complicating the matter.

Who Is Affected?

The underpayments affect several groups of pensioners, including:

• Married women on low state pensions: These individuals may have missed out on pension increases that should have been applied automatically when their partner retired.
• People whose pension was not reassessed after the death of their spouse: This error has left many widows and widowers without the correct pension payments they were entitled to.
• Over-80s whose state pension entitlements were not increased: Pensioners over the age of 80 are entitled to a higher pension, but some have been underpaid because of this oversight.

Additionally, the DWP has said that a single case may be affected by more than one error. For example, someone might qualify for back payments due to both the death of a spouse and the lack of an automatic pension increase. These cases could be counted under multiple categories.

How Much Could Pensioners Be Owed?

According to the DWP, the average underpayment amounts are:

• Widowed pensioners: £11,725
• Married women (category BL): £5,553
• Over 80s (category D): £2,203

These figures represent the typical amount that pensioners could receive as part of their back payments. For some individuals, the amount could be significantly higher, particularly if multiple errors have been identified.

Additionally, another correction exercise is underway to address missing periods of Home Responsibilities Protection (HRP).

HRP was introduced to protect individuals who took time off work to raise children or care for others. The missing HRP periods could lead to inaccurate state pension payments, and the DWP has already identified 5,344 underpayments during the current exercise, amounting to around £42 million.

Experts Weigh In

Sir Steve Webb, a former Liberal Democrat pensions minister, has been at the forefront of uncovering these pension errors.

He explained that as the HRP correction exercise continues to gather momentum, the amount of state pension arrears paid out will likely rise sharply. In a previous HRP correction exercise, the DWP paid out £83 million in back payments.

“Many of those who lost out were women,” Sir Steve said. “Some were underpaid for decades, and tragically, some went to their graves without receiving the correct state pension.”

Rachel Vahey, the head of public policy at AJ Bell, emphasized the scale of the problem. “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. All those affected by this scandal must receive the money they are owed as quickly and efficiently as possible.”

What Does the DWP Say?

In response to the issue, a DWP spokesperson stated, “Our priority is ensuring pensioners receive the dignity and security they deserve in retirement and that state pension underpayment rates remain as low as possible.

We have now completed the vast majority of cases in the exercise as planned, with a small number of outstanding cases due to further documentation needed from the customer.”

The DWP has reassured pensioners that it is committed to resolving the underpayment issue and ensuring that everyone who is owed money receives their correct entitlement. However, with many cases still under review, it may take time before all payments are made.

How to Claim the Back Payments?

If you believe you are owed back payments, it is important to check whether your state pension has been correctly calculated.

The DWP has set up a helpline for affected pensioners, and you can contact them directly to discuss your case. For those who have passed away, family members or estate representatives may need to get involved to claim the arrears.

While the DWP continues to work through the cases, pensioners should not delay in contacting the department if they believe they are owed money. The department’s efforts to identify underpayments are ongoing, and new claims may still be discovered.

Conclusion

The DWP’s state pension underpayment scandal has affected thousands of pensioners across the UK, with some individuals owed up to £12,000 in back payments.

While the department has made significant strides in addressing the issue, pensioners must remain vigilant and check their records to ensure they are receiving the correct pension payments.

As more cases are reviewed and additional errors are identified, the amount owed could continue to grow, and it is essential that all those affected receive the payments they are entitled to.

This issue underscores the need for transparency and accuracy in the administration of state pensions to prevent similar problems from arising in the future.

Pensioners who suspect they are affected should take action now, and the DWP is expected to continue resolving cases as efficiently as possible.