Women robbed of £1BN pension cash
Thousands miss out on up to £128k EACH as audit lays bare scandal stretching back 35 years
OLDER women have been denied up to £128,000 thanks to chronic state pension blunders stretching back more than 35 years, an audit reveals. The true scale of the £1 billion underpayment scandal is today laid bare by a review at the Department for Work and Pensions (DWP).
The report shows at least 40,000 have died without receiving the state pension they were entitled to in the last four years alone.
The underpayments affect mostly women who claimed their pension before April 2016 and did not have a full national insurance record but were entitled to a higher rate based on their spouse’s contributions. The DWP has admitted that it owes more than £1billion to 134,000 pensioners — with an average of £8,900 owed to nearly one in 100 retirees.
But the National Audit Office (NAO) yesterday warned that the DWP’s estimates were ‘highly uncertain’. Its report found the scandal was down to ‘repeated human errors over many years’.
The auditor said the problem was ‘almost inevitable’ because of complex record keeping rules, an outdated IT system and labour-intensive work when handling claims.
Staff made errors because they found instructions difficult and lacked training, the report found.
It also discovered the DWP was still making errors when reviewing payments — with mistakes found in 200 cases out of 1,500. It comes as the DWP aims to have 544 fulltime staff working on fixing the scandal by January in an exercise that will cost £24.3 million.
Yet the under-strain department is now struggling to clear a logjam of new claims for the state pension — with an extra 40,000 applications piling up in July. The DWP, which has already paid out more than £60million, said it will contact all underpaid pensioners or their next-of-kin before the end of 2023.
But the families of tens of thousands of underpaid pensioners who died are unlikely to receive a penny because records are destroyed four years after someone’s death.
Former pensions minister Steve Webb, partner at LCP, says: ‘This report highlights that DWP failed to act over a period of many years when errors were found in state pension assessments.
‘We now need full transparency from DWP about the correction process, with regular updates and a full explanation of exactly which cases are being reviewed.
‘It should also explain how these errors were allowed to go on for so long and what lessons have been learned.’
Meg Hillier, chairman of the public accounts committee, says: ‘Although it is positive that DWP is now working to put this right, this is not the first widespread error we have seen in DWP in recent years. Correcting these errors comes at great cost to the taxpayer. DWP must provide urgent redress to those affected and take real action to prevent similar errors in future.’
Gareth Davies, the head of the NAO, says: ‘The impact of the underpayment of state pension on those pensioners affected is significant. It is vital that the Department for Work and Pensions corrects past underpayments and implements changes to prevent similar problems in future.’
A DWP spokesman says: ‘We are fully committed to ensuring the historical errors that have been made by successive governments are corrected and, as this report acknowledges, we’re dedicating significant resource to doing so.
‘Since we became aware of this issue, we have introduced new quality control processes and improved training to help ensure this does not happen again.’