One in 20 underpaid state pension as errors hit record high

Retirees missed out on millions of pounds in state pension payments in the last tax year thanks to thousands of errors by civil servants, official data have revealed.

More than one in 20 retirees were underpaid after a litany of “official errors”, the Department for Work and Pensions ( DWP) has admitted. It comes as separate data reveal that a third of DWP staff were not working at its head office at the end of last month.

Sir Steve Webb, a former pensions minister, said that the scale of mistakes was “truly shocking”.

“Urgent action is needed to drive up standards of administration,” he said.

Overall state pension underpayments hit a record high last year, with retirees missing out on

£ 670m, up by almost a quarter compared with the year prior.

Some state pensions were overpaid, but at just a fraction of overall underpayments, at £100m.

Civil servants’ mistakes accounted for £580m, or 87pc, of total state pension underpayments. It comes as concerns rise over the number of civil servants working from home. In the DWP, around a third of staff were not working in its Westminster headquarters during the third week of April.

Helen Morrissey, of the broker Hargreaves Lansdown, added that the mistakes primarily affected women who retired before 2016 under the “old” state pension system, who were owed uplifts in their pension when their husbands retired or died.

Ms Morrissey said: “Many of these underpayments go back years and amount to thousands of pounds. Government is making headway in making these repayments, but the scale of the problem is vast, and it will take time to complete but in the meantime many of these people have been under financial strain.”

A government spokesman said: “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 0.5pc of expenditure. Where errors do occur, we are committed to fixing them as quickly as possible.”