Hundreds of thousands still owed state pension error refunds – are you eligible?

HUNDREDS of thousands of pensioners are still waiting for cash back after errors meant that they were underpaid.

Estimates suggest that 40,000 pensioners due money back have died before receiving it.

The scale of the error has left over by more than £1billion in total, according to the Department for Work and Pensions (DWP).

And while the DWP has released the latest figures for its progress in setting things right - thousands are still owed money back.

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown said: "The DWP has let pensioners down on a massive scale – particularly women who tend to retire on lower incomes anyway.

"What’s more, the National Audit Office estimated around 40,000 people who were due a repayment had sadly died without receiving it," said Tom Selby, head of retirement policy at AJ Bell.

The DWP has been actively reviewing the state pension accounts of thousands to ensure that any underpayments are identified.

And of the 111,953 accounts checked between January 11, 2021 and October 31, 2022, exactly 31,817 underpayments were identified.

This means that £209million in state pension underpayments is owed back - equating to £6,958 per case.

Shockingly, some of these underpayments go as far back as 1985.

Those affected by the error identified by the DWP are pensioners who first claimed the state pension before April 2016.

These pensioners were also unlikely to have a full National Insurance record.

They should have received increases to the basic state pension but didn't due to an error that the National Audit Office has blamed on complex rules and outdated IT systems that require claims to be made manually instead of being automated.

But some who have since passed away and their families may never get what they are owed.

The DWP has been contacting those affected by the errors, mostly women who are widowed, divorced or who have some of their entitlement based on their husband’s pension contributions.

But many people could still be missing out on significant sums because there is little guidance for those concerned they are being underpaid their state pension.

Mr Selby said: "While it is positive the government has identified over £200 million of state pension underpayments, this is still a long way short of the £1 billion the National Audit Office (NAO) estimates is owed to pensioners.

"This saga is particularly tragic as many of the people affected will have been struggling unnecessarily for years.

“It is absolutely critical all those affected by this scandal receive the money they are owed as quickly and efficiently as possible."

Ms. Morrissey said: "The DWP has a gigantic task ahead of it to resolve these issues and it must pull out all the stops to make sure it happens as soon as possible."

Who is affected by state pension underpayments?

Around 237,000 retired stay-at-home mums may have missed out on a pension hike when their husbands retired.

Their payments should have risen to 60% of their husband’s basic state pension, the amount women with low National Insurance contributions got under the old pension system.