Government failing to reach ‘vast majority’ of mothers suffering from state pension underpayments

New statistics and supporting research published today by DWP show that efforts to fix state pension underpayments have so far failed, according to former pensions minister Steve Webb. 

The errors relate to missing ‘Home Responsibilities Protection’ (HRP) or National Insurance credits for time at home with children.

In its last annual report, published in summer 2024, DWP set aside £1.1 billion for payment of arrears to women affected and estimated that around 194,000 people could see corrections.

But today, DWP’s latest report on their large scale correction exercise in partnership with HMRC reveals that to date only 12,379 cases with arrears have been identified, resulting in payments of £104m – about a tenth of the original estimate.

As well as general publicity, the main method used to alert women to their potential underpayment has been a letter in the post, and HMRC has now sent 370,000 letters, primarily to those over pension age.

But the response rate to these letters has been low, and DWP therefore commissioned research into why people are not replying to these letters.

Many of the recipients of the letters are elderly and have limited ability with the internet; but the government has adopted a ‘digital by default’ application process, encouraging people to use an online checker for eligibility and then to make online claims for HRP.

Many recipients said that they thought the letters might be scams, and so did not respond, while people also reported being anxious about engaging with government.

Some thought that they probably would not be eligible or that it was now ‘too long ago’ to put things right; the research found that “Participants generally relied on their own assessments of eligibility, rather than using the online tool identified in the letter”.

In addition, some simply did not understand the connection between historic receipt of child benefit and entitlement to HRP and how this could affect their state pension now.

Separate figures from DWP suggest that the total amount of state pension arrears to be paid out by the Government because of multiple errors is set to pass the £1 billion mark this year.

Steve Webb, partner at pension consultants LCP, said: “It is deeply disappointing that efforts to track down mothers being underpaid their state pension have so far failed to reach the vast majority of those who the Government thinks have lost out. Writing letters to elderly people which guide them towards a two-stage online process was always going to have a low success rate. 

"People are understandably wary of scams, and expecting them to do their own online eligibility check before submitting an online claim was bound to put many people off. Whilst DWP deserve credit for conducting research into the reasons for the failure of the strategy so far, it is vital that efforts are now redoubled to make sure that far more people get the state pension that should have been theirs by right."