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LCP: DWP reveal new ‘catalogue of blunders’ on state pensions in new FOI response

Retirement

A new Freedom of Information reply obtained by LCP partner Steve Webb has revealed a series of state pension errors by the DWP prior to the current large-scale correction exercise. The errors range from those affecting a handful of people to multi-million-pound blunders, and several had not previously been made public.

Two major state pension blunders have previously been made known to the public and were subject to large scale rectification programmes:

  • A large-scale correction of cases where parents were due ‘home responsibilities protection’ for time at home with children but this was never mapped onto their state pension record; the correction exercise ran from 2009-2011, benefited around 36,000 people and resulted in £83m in arrears being paid (see: Microsoft Word – 110615 – HRP correction exercise ad hoc analysis – FINAL.d… (publishing.service.gov.uk));
  • The current correction exercise running 2021-23, designed to identify 134,000 pensioners who have been underpaid state pensions and are owed around £1 billion in backpayments.

However, the FOI reveals a further six errors in state pension payments since 2007.  The most important of these include:

  • An error affecting people who reached pension age under the old system and whose partner reached (or would have reached) pension age under the new system and has now died; an error was made in the way these payments were uprated;
  • Under the new state pension women who paid the ‘married woman’s stamp’ (technically known as the ‘reduced rate election’) may qualify for a concessionary rate of payment if they are married, divorced or widowed and would otherwise get a low pension in their own right; in 2019, three years after the new system came into force, it was noticed that some married women were not being paid this transitional amount in line with their legal entitlement; however, cases are still emerging where women are not being paid the correct amount under these special rules;

The FOI also reveals some much smaller errors including entering incorrect figures for maximum pensions, some small underpayments of State Second Pension and errors where people had unusually large amounts of deferred state pension.

Commenting, Steve Webb, partner at LCP said:

“Whilst anyone can make a mistake, what is worrying about this catalogue of errors is how long it can take for anyone to spot that anything is wrong.  In one case it was three years after the new state pension was implemented before anyone spotted a systematic problem with the payments to certain married women.  It is also surprising that information about these errors and correction exercises has not previously been made public.  DWP need to improve on two fronts – better error checking to make sure people are not paid the wrong pension in the first place, and greater transparency so that the public is told when things have gone wrong”.

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