Tens of thousands of UK pensioners have been underpaid their rightful state pension, with the Department for Work and Pensions (DWP) confirming over £804 million in missed payments. Since launching a comprehensive review in January 2021, more than 130,000 cases have come to light—many involving elderly citizens who relied heavily on this income in retirement. With some pensioners owed up to £12,000, the situation is now regarded as one of the most significant benefit errors in recent history.
Let’s break down what happened, who is affected, and what steps you can take if you think you’re owed money.
The Scale of the Pension Underpayment Crisis
Between January 2021 and March 2025, the DWP identified 130,948 pensioners who were underpaid due to administrative oversights and outdated systems. These errors resulted in £804.7 million in missing payments. In many cases, the issue stemmed from pensions not being updated after major life events, like the death of a spouse or turning 80.
Unfortunately, some pensioners passed away before they could receive what they were due, and in many cases, estates may not be eligible to reclaim the funds.
Who Has Been Affected?
The pension underpayment issue has largely affected three specific groups:
1. Married Women (Category BL)
Women who should have received an uplift to 60% of their husband’s basic state pension were often overlooked, especially if their pension wasn’t automatically updated when their spouse retired.
2. Widowed Pensioners
These individuals may not have had their pensions properly recalculated after their spouse died. In some cases, they were eligible to inherit part of their partner’s state pension, but this wasn’t applied.
3. Individuals Over 80 (Category D)
Once someone turns 80, they may be entitled to a higher rate of basic pension. However, thousands missed out because the system failed to automatically make that adjustment.
Some pensioners fall into more than one category—resulting in even more significant underpayments.
Average Amounts Owed
The average amount owed varies significantly depending on the category of the pensioner affected:
| Group | Average Arrears |
|---|---|
| Widowed Pensioners | £11,725 |
| Married Women (Category BL) | £5,553 |
| Over 80s (Category D) | £2,203 |
In addition, a Home Responsibilities Protection (HRP) correction has uncovered 5,344 additional cases, worth £42 million. HRP was a policy designed to protect pensions for parents and caregivers who took time off work.
Growing Pressure for Accountability
Former pensions minister Sir Steve Webb has been instrumental in bringing these issues to light. He’s been outspoken in calling for faster repayments and has criticized the slow pace and scale of the problem, particularly for women underpaid for decades.
Rachel Vahey, a financial expert from AJ Bell, called it one of the biggest benefit errors in recent years and urged the DWP to ensure full and fair compensation quickly.
What Has the DWP Said?
The DWP has acknowledged the issue and said it’s committed to resolving all cases. According to a spokesperson:
- Most underpayments have now been corrected
- Some cases are still under review due to missing information or more complex pension histories
They stressed their commitment to ensuring that all pensioners receive the financial support and dignity they deserve.
What You Should Do If You Suspect Underpayment
If you believe you—or someone you know—might have been underpaid, here’s what to do:
- Review your state pension records, particularly if you’re in any of the affected groups
- Contact the DWP Pension Service to request a review of your payments
- Gather relevant documents, such as your spouse’s pension information or death certificate
- Seek help from trusted charities, including Age UK or Citizens Advice, if you’re unsure where to start
With over £800 million already uncovered and thousands still potentially affected, this pension scandal serves as a stark reminder of the importance of regular benefit checks. The government is taking steps to fix past errors—but it may be up to individuals to speak up and claim what’s rightfully theirs.
FAQs:
Can estates claim underpaid pensions if the person has died?
In some cases, yes. The DWP reviews whether estates are eligible, but not all can reclaim missed payments.
How do I know if I fall into an affected category?
You may be affected if you are a married woman, are widowed, or turned 80 and didn’t see your pension increase.
How long will it take to receive back payments?
If eligible, payments are typically processed after the DWP completes their review, but delays can occur if documentation is missing.
