State pension UK: MPs demand to know how DWP will pay back £3billion of underpayments | Personal Finance | Finance


State pension payments are largely dependent on National Insurance records but a person’s date of birth can also impact what they’ll receive. State pension rules were upended in 2016, resulting in old (or basic) and new rules coming into play.

In early March, the OBR published its economic and fiscal outlook alongside the Chancellor’s Budget, which laid out how some people had been under-paid state pensions for several years.

The report detailed: “DWP has also identified underpayments of state pension relating to entitlements for certain married people, widows and over-80s back to 1992.

“Our forecast reflects an initial estimate that it will cost around £3 billion over the six years to 2025-26 to address these underpayments, with costs peaking at £0.7 billion in 2021-22.”

The Government assured these underpayments will be refunded but recently, they were pushed on exactly how this will be handled.

READ MORE: WASPI ‘call on the Government’ to compensate 1950s women

“Following your statement, I tabled written questions to ask how much the Department had paid in back payments as a result of this exercise, and how many underpayments had been identified.

“The answer to both questions was: ‘Parliament was updated on this issue through a written statement laid on 4 March and a topical statement by the Secretary of State during DWP oral questions on 8 March. I have committed to updating Parliament as the correction exercise progresses.’

“The Permanent Secretary was able to tell us in October 2020 that ‘we have received almost 11,000 cases. We have reviewed 7,200 of them and 5,300 of them turned out to be correct’ and that repayments had been made to ‘2,000 people so far’.

In light of these details, Stephen went on to detail the committee “would be grateful” for more information on this exercise.

The Work and Pensions Committee concluded by detailing they’d be “grateful” for a reply by April 8.

The women who may be affected by this underpayment debacle include those:

  • Who are a married woman over state pension age who reached pension age before April 6, 2016
  • Whose husband is over state pension age
  • Whose basic state pension is less than 60 percent of his basic amount

To see if a state pension has been underpaid, retirees can contact the DWP for further information or the Government’s pension service.

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