The DWP project to fix hundreds of thousands of errors in state pension payments is still well behind schedule, according to LCP partner Steve Webb.
DWP has admitted that there are systematic errors in state pension calculations for three main groups, married women, who should have received an upgrade to a 60 per cent basic state pension when their husband retired; widows and widowers who should have inherited an enhanced state pension when their spouse died and over 80s already in receipt of a state pension when they turned 80, who should have been automatically upgraded to a 60 per cent basic state pension.
In comparison to a year earlier, the DWP gave a significantly higher estimate of the number of persons receiving underpayments and the total amount of underpayments in its 2022 Annual Report.
DWP believes that it has underpaid 237,000 pensioners a total of £1.46bn, according to the new figures.
In January 2021, a project to locate these seniors and send payouts was launched, but it took a long time to hire and educate people, and early progress was sluggish. Another problem is learning that there are 100,000 more underpayments than initially believed.
According to the data, the DWP had given out £106m to slightly over 15,000 claimants as of February 2022. After eight months, they had given roughly 32,000 people £209m.
But this only represents 13 per cent of the expected total population and 14 per cent of the estimated debt. There are still almost a billion pounds owing.
The DWP’s monthly “run rate” has only been about 2,000 payments each month between February and October. Webb says that even at 3,000 instances per month, it would take at least another five years to complete the task.
Webb says: “The scale of these underpayments is so great that putting it right could easily end up taking four years or more from start to finish. It is quite shocking that well over a hundred thousand pensioners are to this day receiving the wrong rate of pension, and the DWP is clearly way behind schedule in fixing the problem. With cost of living pressures affecting many elderly people on low incomes, it is essential that the pace of fixing these errors is stepped up and people get the money they are due as soon as possible”.