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Underpayments of State Pension - Government Resolution

The Pensions Minister, Guy Opperman published a written statement providing an update on uplifts to the State Pension. Please find a summary of key points below:

 

  • The Department became aware of the issues with State Pension underpayments in 2020 and has sought to investigate the issue.
  • From August 2020 to January 2021 the department carried out a number of complex scans of legacy computer systems that analysed millions of State Pension records. The scans identified cases requiring further investigation.
  • These cases can be categorised into the following groups:
    • People who are married or in a civil partnership who reached State Pension age before 6 April 2016 and may be entitled to a Category BL uplift based on their partner’s National Insurance contributions. Following a change in the law in 2008, when their spouse became entitled to a State Pension, some people should have had their basic State Pension automatically reviewed and uplifted. Underpayments occurred in cases when this did not happen.
    • People who have been widowed and their State Pension was not uplifted to include amounts they are entitled to inherit from their late husband, wife or civil partner.
    • People who have not been paid Category D State Pension uplift as they should have been from age 80.
  • For each group of affected individuals, the IT system produces an electronic prompt which makes DWP staff take further manual action to assess whether an individual’s State Pension amount should be increased.
  • Where underpayments are identified, the department will contact the individual to inform them of the changes to their State Pension amount and of any arrears payment they will receive in accordance with the law.
  • The department’s current estimate of the total costs of repaying these arrears is £2.7 billion. There will also be increased expenditure on corrected live cases of around £90 million per year on average in the coming years.