A pension warning has been issued to millions of individuals who are missing out on £5,000 each due to errors in the Department for Work and Pensions (DWP). According to the Parliamentary Accounts Committee (PAC), over 200,000 pensioners have been left "out of pocket" by a total of £1.3 billion. The PAC has expressed concerns about the high level of fraud and error in benefit spending, and warned that the DWP does not expect this to return to pre-pandemic levels until 2027–28.
Historic Underpayment of State Pension
The PAC has expressed its concern about another historic underpayment of state pension, estimating that around 210,000 pensioners have been affected, resulting in a total of £1.3 billion in missed payments. This error, which primarily affects women who were stay-at-home moms, has led to an average amount owed of £5,000 per person. The PAC has called on the DWP to take more action to detect underpayments and ensure that pensioners receive the money they are owed.
Impact on Women and Widows
The error in the state pension system is separate from another error that has resulted in £1.2 billion being underpaid to around 165,000 individuals, mainly widows. The PAC has emphasized that the DWP must do more to detect and correct underpayments before they have a significant impact on pensioners and other claimants. The committee has also highlighted that the majority of fraud and error in benefit spending is driven by Universal Credit, which was overpaid by 12.8% (£5.5 billion) in 2022–23.
Call for Action and Recalculations
The PAC has called on the DWP to respond to its report and implement measures to reduce fraud and error. The committee has acknowledged the department's plan to tackle these issues and has commended its transparency. However, it insists that the DWP needs to demonstrate a meaningful reduction in fraud and error levels. Individuals who believe they may be affected by the errors are advised to check their National Insurance record and contact the HMRC National Insurance helpline for assistance. Recalculations and arrears payments will be made to correct any errors.
Conclusion
The errors in the state pension system have left millions of individuals missing out on £5,000 each, according to a warning from the Parliamentary Accounts Committee. The committee has criticized the DWP for its high level of fraud and error in benefit spending and called for action to rectify the situation. It is crucial that the DWP takes steps to ensure accurate and timely payment of pensions to those who are entitled. Individuals who believe they may be affected by the errors are advised to check their National Insurance record and contact the HMRC for assistance.
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