Many people may not be aware that they are potentially missing out on approximately £7,293 each due to an error in State Pension calculations by the Department for Work and Pensions (DWP).
The DWP's most recent Annual Report and Accounts for 2023-24 provides detailed insights into its spending.
This covers both benefit underpayments and fraudulent payouts. The DWP is currently examining State Pension 'underpayments', as some people did not receive the amounts they were entitled to.
DWP's Annual Report Highlight State Pension Underpayment Issues
The DWP is currently conducting what it refers to as a State Pension underpayment 'LEAP' exercise to uncover owed underpayments. According to the Express, three primary groups of people are due compensation.
Identifying Key Groups Owed Compensation
The compensation involves married people or those in a civil partnership who attained the State Pension age before April 6, 2016 and should be receiving a Category BL increase according to their partner’s National Insurance contributions. It also includes that those who were widowed and did not receive an increase in their state pension to reflect any amounts they were eligible to inherit from their deceased spouse or civil partner.
The third key group consists of those who are 80 and currently receive a State Pension amounting to less than £101.55. They may be eligible for a Category D State Pension, which is £101.55 weekly. This suggests that anyone born before 1944 might be entitled to additional funds if they fall under this category.
Those who have reached the pension age before April 2016, meaning they were born before 1959 or 1960 depending on their exact age, may be entitled to benefits under the first category.
The report stated: “Between January 11, 2021, and the end of March 2024, the checking process has identified 99,558 underpayments, with a total of £594 million owed.
“Current estimates of the total arrears due is £970 million to 133,000 pensioners and recognised a provision of £369 million, reflecting the outstanding amounts it still expects to repay. Last year, it was estimated that DWP underpaid £1.17 billion to 170,000 pensioners.
“The final total value of the underpayments will only be confirmed by the completion of the exercise.”
This indicates that 133,000 retirees are still owed approximately £7,293 each, considering the £970 million allocated to 133,000 pensioners so far. The total amount owed could increase as the review is not over yet.