Nearly 140,000 pensioners underpaid by DWP with £800 million owed

The government predicts all cases will be resolved by the end of March 2027

More than £800 million is owed by the government in State Pension underpayments, according to new figures.

The Department for Work and Pensions (DWP) published an update on Thursday (April 24) of cases checked as part of its ongoing correction exercise which started in January 2021.

Checking process between January 11, 2021 and March 31, 2025 identified 130,948 underpayments of State Pension - with a total of £804.7 million owed.

In some cases, people may have received an overpayment of another benefit such as pension credit, the department said.

The figures come after the DWP announced in 2021 that they would be checking hundreds of thousands of pension records to see if people have been underpaid.

Those affected by errors include married women on low state pensions whose pension was not automatically uplifted when their partner retired; people whose pension was not automatically reassessed on the death of their spouse; and over-80s whose state pension entitlements were not automatically increased.

It also thought that there may be some cases where a person who has been underpaid has died and the DWP has been unable to identify an estate to which to pay arrears.

According to PensionAge, so far repayments include £252.8 million paid to 47,004 married women, £483.4 million to 50,261 widowed cases, and £68.5 million to 33,683 pensioners over 80 - with average pay-outs ranging from £2,200 to over £11,700.

Cases may be checked for more than one potential cause of error so a claim may be counted in more than one category, the DWP correction exercise publication said.

Another state pension correction exercise is looking into missing historic periods of Home Responsibilities Protection (HRP), leading to inaccurate State Pension payments.

Between January 8 and September 30, 2024, the exercise identified 5,344 underpayments, with total arrears of around £42 million.

Sir Steve Webb, a former Liberal Democrat pensions minister who has been exposing state pension errors, said the amounts paid out under the current HRP exercise are expected to rise sharply as it gathers momentum.

A previous HRP correction exercise over a decade ago led to state pension arrears payments of £83 million.

Sir Steve, who is now a partner at consultants LCP (Lane Clark & Peacock), said: “The vast majority of those who lost were women, some of whom were underpaid for decades or even went to their grave never paid the right state pension.

“The remaining corrections need to be handled as a matter of urgency. This should never be allowed to happen again.”

Rachel Vahey, head of public policy at AJ Bell, said: “This is one of the biggest benefit scandals of modern times. DWP miscalculations have left thousands of pensioners – mainly women – short on their state pension payments.

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

A DWP spokesperson said: “Our priority is ensuring pensioners receive the dignity and security they deserve in retirement and that state pension underpayment rates remain as low as possible.

“We have now completed the vast majority of cases in the exercise as planned with a small number of outstanding cases due to further documentation needed from the customer.”

The DWP recently said that it is expecting to resolve all remaining state pension underpayment cases by the end of March 2027.