Pensions  

State pension errors continue despite correction exercise

State pension errors continue despite correction exercise

The Department for Work and Pensions has been accused of continuing to “wrongly” tell women they have no pension entitlement when, in some cases, they were due thousands each year.

In a letter sent to pensions minister Guy Opperman today (June 7), partner at consultancy firm Lane Clark & Peacock, Steve Webb, evidenced four examples between 2020 and 2022 where he alleged the department made errors in its calculations of state pension entitlements.

Webb, who was pensions minister under David Cameron, said although the number of examples in the letter is small, they were “potentially life-changing” for all the women concerned.

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Webb submitted a Freedom of Information Request to DWP in 2019 which highlighted similar errors.

The errors relate to women who previously paid a reduced rate of national insurance contributions.

These women can find that under the rules of the new state pension they lack the 10 years of full rate contributions necessary to qualify for any state pension. 

But there is a special concession for such individuals, provided that they were paying the reduced stamp 35 years before they retired. 

These women can automatically get a pension of £85 per week if they are married or £141.85 if they are widowed or divorced.

A National Audit Office report was published last year blaming the government department more broadly for “years” of “human errors” which have resulted in a total of 134,000 pensioners - 90 per cent of which are understood to be women - being underpaid state pension entitlements to the collective tune of £1bn.

DWP is currently embarking on a Legal Entitlements and Administrative Practices (LEAP) exercise, which has seen it spend millions on recruiting hundreds of staff to address and remedy these underpayments.

‘DWP thought they’d fixed errors they hadn’t’

But Webb has now drawn the DWP’s attention to examples since then, the most recent dating to a woman who retired in April 2022.

In two of the four cases, he said women were told they had no pension entitlement, when in fact they were due a pension of just over £86 and £85 per week, respectively, taking both their annual pension provisions from zero to more than £4,000.

In both these cases, DWP has accepted these payments after one woman contacted her local MP, and after the other threatened to contact hers.

“When DWP admitted to me that they had been making errors for this group of women I assumed that they would have put in place procedures to sort out the problem,” said Webb.

“Yet I continue to hear from women who have been wrongly told that they are not entitled to a pension. 

“What is particularly worrying about these errors is that DWP apparently already knew that there was a potential problem and thought they had fixed it.”

Webb also cited his ongoing concern over how many other women there may be who have trusted what DWP have told them and are now struggling to get by without a pension they might be entitled to.