The Department for Work and Pensions (DWP) has confirmed a widespread issue affecting tens of thousands of UK pensioners—a total of £804.7 million in state pension underpayments. Since the review began in January 2021, over 130,000 cases have been identified, with some individuals owed up to £12,000.
This problem highlights longstanding flaws in the pension system, particularly for married women, widowed individuals, and those aged over 80. As the government continues to address the shortfalls, pensioners are being urged to check their records to ensure they’re receiving their full entitlement.
The Scale of the Underpayment Issue
Between January 11, 2021, and March 31, 2025, the DWP identified 130,948 cases where pensioners had been underpaid. This amounts to over £800 million in missed payments, due to administrative errors, outdated processes, and failures to reassess pensions when life events—such as a spouse’s death—occurred.
Unfortunately, in some cases, the affected pensioners have passed away, meaning the money cannot always be reclaimed by their estate.
Who Has Been Affected?
The majority of underpayment cases fall into three main groups:
1. Married Women (Category BL)
- Affected when their pensions weren’t automatically increased when their husbands reached state pension age.
- These women were supposed to receive 60% of their husband’s basic state pension, but many were left on a lower rate.
2. Widowed Pensioners
- Pensioners whose state pension wasn’t properly recalculated after their spouse passed away.
- Some were eligible for more due to inheriting part of their partner’s pension.
3. Individuals Over 80 (Category D)
- Pensioners who did not automatically receive an increase once they turned 80, despite being entitled to it under UK pension rules.
Some individuals may fall into more than one category, resulting in larger underpayments.
How Much Could You Be Owed?
| Group | Average Arrears |
|---|---|
| Widowed Pensioners | £11,725 |
| Married Women (Cat BL) | £5,553 |
| Over 80s (Cat D) | £2,203 |
Additionally, a separate correction involving Home Responsibilities Protection (HRP)—a policy designed to protect pension entitlements for carers and parents—has uncovered 5,344 cases, worth £42 million as of September 2024.
Calls for Urgent Action
Former pensions minister Sir Steve Webb has played a major role in uncovering the errors, pushing for urgent reforms and back payments. He criticised the scale of the problem and noted that some women had been underpaid for decades or died without ever receiving what they were due.
Financial expert Rachel Vahey from AJ Bell called it one of the biggest benefit scandals in years, urging the DWP to prioritise quick and fair compensation.
What Has the DWP Said?
A spokesperson for the DWP acknowledged the seriousness of the issue and said they remain committed to correcting underpayments and ensuring retirees receive the dignity and financial security they deserve.
- Most affected cases have been resolved.
- A small number of cases are still under review due to missing documentation or complex histories.
What Should You Do If You Think You’ve Been Underpaid?
If you think you or a relative may have been underpaid:
- Check your state pension records, especially if you fall into any of the affected categories.
- Contact the DWP Pension Service directly to ask for a review.
- Prepare any evidence or documents (such as your spouse’s pension status or death certificate, if relevant).
- If you’re unsure, organisations like Age UK and Citizens Advice can help guide you.
FAQs:
What is the state pension underpayment issue?
It refers to over 130,000 pensioners being underpaid a combined £804.7 million, due to missed entitlement increases and administrative errors.
Who is most affected?
Primarily married women, widows, and people over 80 whose pensions were not properly increased.
How much money could be owed?
Some individuals are owed up to £12,000, with average repayments between £2,000 and £11,700 depending on the category.
What is Home Responsibilities Protection (HRP)?
A scheme designed to protect pension rights for people who took time off work to care for children or relatives. Errors in applying HRP have led to further underpayments.
