On Friday the Public Accounts Committee will issue its report into state pension underpayments. DWP estimate that around 135,000 people (overwhelmingly women) have been incorrectly underpaid around £1 billion in state pensions, with some errors dating back decades. The errors first came to light when LCP partner and former pensions minister drew cases to the attention of the DWP at the start of 2020 alongside website This is Money.
The Committee report refers to the episode as a ‘shameful shambles’ and makes a series of recommendations to the DWP. These include assessing whether antiquated computer systems can be upgraded more swiftly and being quicker to respond when mistakes are identified. The Committee also endorse a call by Steve Webb for the Government to explain why divorced women have so far been excluded from having their state pensions checked. The report highlights the fact that people who finally receive backdated payments from DWP are given little help to understand what this means for their tax position and how any lump sums might affect their entitlement to means-tested benefits or help with social care costs.
Commenting, Steve Webb (pictured) said:
“The Committee are right to be highly critical of DWP over this whole debacle. It is shocking that DWP’s regular checks regarded the level of error on state pensions as too small to be worth investigating when in reality many thousands of people have missed out on potentially life-changing amounts of money. I welcome the fact that the Committee has highlighted the fact that divorced women have so far been excluded from this exercise and I call on the Government to do more to ensure that these women also have their pensions checked. DWP’s defensive reaction to questions and scrutiny over this issue suggest that lessons have still not been learned. There are still far too many people missing out on the state pension to which they are entitled and DWP needs to track them all down as a matter of urgency”.
