DWP Confirms £804 Million in State Pension Underpayments to Nearly 140,000 Individuals

The UK government’s Department for Work and Pensions (DWP) is facing serious criticism after it admitted to a major mistake that led to underpayments in state pensions for nearly 140,000 people.

This error has triggered repayments of over £804 million so far, with experts saying this issue should “never happen again.”

The mistake mostly affected older women — married women, widows, and those aged over 80 — who were due an enhanced state pension but didn’t receive it.

Many of them have been underpaid for years, with some reportedly passing away before ever receiving what they were owed.

What Exactly Went Wrong?

Between January 2021 and March 2025, the DWP reviewed more than 877,500 state pension records. During this process, they found that 130,948 pensioners had been paid less than they should have received.

This issue largely affected married women whose husbands retired before 2008, as well as widows and pensioners over the age of 80.

Under older pension rules, many of these women were entitled to boosted payments, sometimes increasing their pensions by up to 60%. But due to DWP’s failure to apply those rules correctly, they missed out on this extra income.

How Much Has Been Paid Back So Far?

As of March 31, 2025:

  • A total of £804.7 million has been set aside to repay affected pensioners.
  • £252.8 million has already been paid back to 47,004 married women.
  • On average, each affected woman has received about £5,553 in arrears.

And this may just be the beginning. Former pensions minister Steve Webb, now a partner at LCP (a pensions consultancy), warned that total underpayments might surpass £1 billion by the end of this year.

What Steve Webb Said About the Blunder?

Steve Webb, who has been a vocal critic of how state pension issues are handled, didn’t hold back. He said:

“We have become so used to stories about state pension errors that it is easy to become dulled to the scale of what went wrong.
The vast majority of those who lost out were women — some underpaid for decades, and sadly, others died before they were ever paid correctly.
The remaining corrections must be made urgently. This must never be allowed to happen again.”

His remarks reflect growing frustration over repeated errors in the pension system, especially when it affects vulnerable people like elderly women.

DWP’s Response

DWP Confirms £804 Million in State Pension Underpayments to Nearly 140,000 Individuals

In a public statement, the DWP acknowledged the problem and tried to reassure the public:

“Our priority is ensuring pensioners receive the dignity and security they deserve in retirement. We are working to keep underpayment rates as low as possible.
We’ve now completed most of the cases as planned, though a few are still pending due to missing documents from the customers.”

While the department claims it has resolved the majority of issues, campaigners and former ministers insist more action is needed — and faster.

Why This Mistake Matters?

This isn’t just about money. For many older women, the state pension is their only source of income. Being underpaid for years — or even decades — has caused emotional stress, financial hardship, and missed opportunities.

Some women found out about the mistake by accident, through news reports or friends. Others say they had no idea they were entitled to higher payments until DWP reached out to them.

It raises serious questions:

  • Why weren’t these women properly informed earlier?
  • Why did it take years and public pressure for DWP to act?
  • What checks are in place to prevent similar problems in the future?

Can This Happen Again?

Unfortunately, experts believe that unless the entire pension system is modernized, similar mistakes could occur in the future.

Steve Webb has long advocated for an automatic alert system that would flag when someone’s pension entitlement changes, such as after a spouse passes away or hits a certain age.

Right now, many of these processes require manual checks, which increases the chance of human error.

What Should Affected Pensioners Do Now?

If you’re worried that you or a loved one might have been underpaid:

  1. Check your National Insurance record and pension details on the UK Government’s official website.
  2. Contact the Pension Service to ask if you’re affected.
  3. If you’re not satisfied with the response, consider getting help from a pensions adviser or consumer rights group.

There are also some helpful resources available online to guide people through the process of checking and claiming unpaid pension amounts.

Final Thoughts

This massive underpayment scandal is a reminder of how important it is for government departments to prioritize accuracy, transparency, and accountability.

The fact that it mostly impacted elderly women, one of society’s most vulnerable groups, makes it even more upsetting.

It’s good that the DWP is repaying the money. But for many, this comes far too late. The real question now is: How will the government make sure it never happens again?

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