The Department of Work & Pensions have revealed it is working to correct a series of state pension errors, the majority of which it has not publicy revealed before.
The problems came to light after a Freedom of Information request made by LCP partner, and former pensions minister Steve Webb.
In total the DWP has been working on eight separate correction exercises, of which only two have been publicly acknowledged before.
Webb says he was surprised not only by the number of problems that have occurred but how long it has taken for these errors to be spotted and addressed.
Webb says that while some of these errors have been trivial, affecting just a handful of people, others have been multi-million pound blunders that had not been previously made public.
Two major state pension blunders have previously been made known to the public and were subject to large scale rectification programmes. This included a an issue affecting parents where the state had failed to include in their state pension record credits for time spent caring for children. The correction exercise ran from 2009-2011, benefited around 36,000 people, and resulted in £83m in arrears being paid.
The DWP is also currently conducting a large scale correction exercise – designed to run from 2021-23 – which aims to identify 134,000 pensioners who have been underpaid state pensions and are owed around £1 billion in back payments.
However, the FOI reveals a further six errors in state pension payments since 2007. The most important of these include:
- An error affecting those who reached pension age under the old system and whose partner reached (or would have reached) pension age under the new system and has subsequently died. An error was made in the way these payments were uprated.
- Under the new state pension women who paid the ‘married woman’s stamp’ (technically known as the ‘reduced rate election’) may qualify for a concessionary rate of payment if they are married, divorced or widowed and would otherwise get a low pension in their own right. In 2019, three years after the new system came into force, it was noticed that some married women were not being paid this transitional amount in line with their legal entitlement. However, cases are still emerging where women are not being paid the correct amount under these special rules.
- The FOI also reveals some much smaller errors including entering incorrect figures for maximum pensions, some small underpayments of State Second Pension and errors where people had unusually large amounts of deferred state pension.
Webb says “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”.
Responding to these finding, a DWP spokesperson says: “This year we will spend over £100 billion 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.”