State pension underpayments hit record levels, DWP figures show

The latest annual statistics on benefit fraud and error from DWP show that underpayments of state pensions have reached record levels.

According to the latest statistics, the total amount underpaid in 2022/23 was £670m compared with £540m in the previous year. 

The DWP release shows that the proportion of claims underpaid remained at 6 in 100 claims in both FYE 2023 and FYE 2022.

The main sources of underpayment were historic errors, meaning that married women on a low pension did not get an automatic increase when their husband retired, or that married women did not get their pension reassessed when their husband died.

In addition, errors recording ‘credits’ for time at home with children (known previously as ‘Home Responsibilities Protection’) also contributed to underpayments.

DWP also reported that some state pensions were overpaid, with a total overpayment of £100m in 2022/23. This means that underpayments were more than six times as large as overpayments.

Steve Webb, former pensions minister and partner at consultants LCP, said: “The continuing scale of state pension underpayment is truly shocking. Whilst it is right that there is a focus on fraud in the benefit system, DWP should be equally concerned where it is not paying people what they are entitled to.

"Urgent action is needed to drive up standards of administration so that pensioners can have confidence that the pension they are being paid is correct."

A DWP spokesperson commented: “Our priority is ensuring pensioners receive the financial support to which they are entitled, and State Pension underpayment rates due to Official Error remain low at 0.5% of expenditure. Where errors do occur, we are committed to fixing them as quickly as possible.”