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Six more state pension errors exposed in ‘catalogue of DWP blunders’

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Written by: Rebecca Goodman
07/04/2022
The Department for Work and Pensions is guilty of a ‘catalogue of blunders’ as six further state pension errors have been exposed.

The state pension errors date back from 2007 and range from those affecting a handful of people to those involving millions.

These six new errors are on top of the two major pension errors which have already been made public, and which have resulted in a large programme to repay those affected.

Former pension minister, Steve Webb, was probing how far the current DWP ‘correction exercise’ on state pensions was a one-off, but his Freedom of Information request revealed a “catalogue of blunders”, he said.

State pension errors

We already knew of the long-term underpayment of state pensions to about 134,000 pensioners, mostly women, which was described as a “shameful shambles” by a committee of MPs last year.

The correction exercise to repay these pensioners, who are owed around £1bn in back payments, is running until 2023.

A second case already publicised involved parents who were due ‘home responsibilities protection’ when they were at home with children, but this was never recorded on their state pension.

The exercise to correct these payments, which affected around 36,000 parents, resulted in £83m being repaid between 2009 to 2011.

But Webb, who is now partner at pension consultancy firm Lane, Clark & Peacock (LCP), found that one mistake affected married couples or those in a civil partnerships.

It involved couples whereby one person would have reached state pension age under the previous system, while their partner who has now died would have reached state pension age under the current system. A mistake was made in the way these payments were made.

The next was an error relating to women who paid the ‘married woman’s stamp’ of a lower rate of National Insurance. Women could opt into this scheme, also known as the ‘reduced rate election’ until it ended in 1977.

In 2019, three years after the new pension system was introduced, the DWP realised that some married women were not being paid the transitional amount they were legally required to receive.

Even now, three years on there are still cases of women not being paid the correct amount under these rules. The DWP did not share figures of how many people may be involved but Webb estimates that it could have impacted around 10,000 women.

Further mistakes involved smaller amounts including some transgender women being able to claim back six days of their state pension; underpayments of deferral amounts and state second pension; as well as incorrect maximum additional state pension values.

If you’re a transgender woman born between 31 October 1953 and 6 November 1953, you can apply for backdated State Pension here.

‘Worrying how long it can take to spot’

Webb said: “Whilst anyone can make a mistake, what is worrying about this catalogue of errors is how long it can take for anyone to spot that anything is wrong.

“In one case it was three years after the new state pension was implemented before anyone spotted a systematic problem with the payments to certain married women.  It is also surprising that information about these errors and correction exercises has not previously been made public.

“DWP need to improve on two fronts – better error checking to make sure people are not paid the wrong pension in the first place, and greater transparency so that the public is told when things have gone wrong”.

A DWP spokesperson said that for those impacted by the other exercises, they have already been contacted or will be in due course so there’s no need for people to contact DWP.

They added: “This year we will spend over £100bn on the state pension and our priority is ensuring every pensioner receives all the financial support to which they are entitled. These correction exercises highlight how, where errors do occur, they are identified and rectified.”

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