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Underpaid state pension: DWP is contacting those affected to pay arrears to them, or their beneficiaries if they have already died
Bereaved families are being told their late relatives could be owed state pension arrears then left in limbo for months by the Department for Work and Pensions.
The amounts involved are not revealed, leaving recipients of letters mystified as to what sums they might eventually receive.
Three cases we investigated recently resulted in separate payouts of £3,800 and £27, and an apology for sending out a letter in error.
But over the past few years, vast errors have led to payouts running into many tens of thousands of pounds, and in some cases awards of more than £100,000.
This was because many elderly married women and widows, and both men and women aged over 80, were underpaid a total of more than a billion pounds in a state pension scandal uncovered by our columnist Steve Webb and This is Money.
In a different HMRC blunder that we highlighted, many mums lost out on large sums in state pension due to holes in their National Insurance records.
As a result, the DWP and HMRC are trying to contact those affected and pay arrears to them – or their beneficiaries, should they have already died – but this has led to frustration over delays and further errors.
Earlier this year Webb assisted a 90-year-old woman’s family, who chased up an initial letter for months and were at one point told verbally by the DWP she could be owed £60,000 or more, but her payout ended up being just over £400.
Webb says it is ‘simply cruel’ to send people letters about state pension underpayments which raise their hopes and then leave them in limbo for months.
He is urging the DWP to put in place a streamlined process so when relatives respond to such letters things progress rapidly to a final decision and a payout.
> Were you or a late relative underpaid state pension? Find out what to do below
DWP staff member said ‘don’t book that world cruise yet’ and laughed
Bereaved daughter Clare Thomas (whose name we have changed) received a letter in January saying her mother, who died aged 87 in spring 2023, might be owed state pension inherited from her late husband.
That was in reference to Ms Thomas’s father, who had previously died aged 85.
Have YOU received a letter from the DWP about arrears? Find out how to contact us below
Ms Thomas was an executor for her late mother, a retired cleaner who lived in Scotland, and she says: ‘In April 2024 I contacted the DWP bereavement team to be told that this could take up to a year to resolve.
‘We were also told that we couldn’t speak to anyone in the particular section of the DWP dealing with underpayments as they “didn’t take calls”.’
During her call, the staff member she spoke to told her ‘don’t book that world cruise yet’ and laughed, which she found astounding and disrespectful.
‘Someone from the bereavement team said that. I thought it was appalling. They were so dismissive,’ she says.
When This is Money asked the DWP to look into the case, it apologised because it turned out state pension had been paid correctly to Ms Thomas’s mother and the letter was sent in error.
A spokesperson said: ‘We apologise to Ms [name redacted] for the inconvenience caused by sending a letter stating her mother was underpaid state pension.
‘This was due to an administrative error, and we have written to [name redacted] to confirm her late mother’s state pension award was in fact correctly paid.’
‘It’s impossible to contact the team actually dealing with this by phone or email’
John Williams is executor to the estate of a close friend, Mary Evans, a retired postmistress who lived in Wales and died in Yorkshire aged 93 in 2020 (names changed).
He was not a beneficiary of her will, but was in sole charge of winding up her estate.
Mr Williams received a letter from the DWP last October which stated Mrs Evans had been underpaid state pension between 2016 and 2020.
He replied immediately but heard nothing further for the next eight months, despite making around a dozen calls and sending a registered letter.
He says although the amount of arrears involved was not revealed, he was told it was substantial during one call to the DWP.
Yet again there seems no way to penetrate the bureaucracy to speak to someone who can actually tell you what is going on
Former Pensions Minister Steve Webb
Mr Williams was also told Mrs Evans’s estate was ‘high on the list to be paid’ but he had to be patient as there were many women in a similar situation and the matter was being discussed in Parliament.
‘I have been told on several occasions that it is impossible to contact the team actually dealing with this matter by telephone or email,’ says Mr Williams.
‘My concern is that I am currently 78 years of age whilst the five residuary beneficiaries who are currently unaware of this matter are all in the 75-95 age group and I am starting to wonder if this matter will be completed during our lifetimes.’
After Mr Williams contacted This is Money, we raised the case with the DWP which paid £3,800 in arrears and apologised to him for the delay.
Bereaved daughter left hanging by DWP for months
Karen Roberts was contacted by the DWP in April about her late mother Anne, a former quality garment inspector for department stores who lived in Scotland (names changed).
It said in a letter her mother had been underpaid state pension for around 12 years before her death aged 80 in 2019, but did not reveal the sum involved.
After hearing nothing more for months, and being told on the phone she could not speak to the relevant department, she and her own daughter contacted This is Money.
Following our intervention, state pension arrears of £27 were paid, with the amount reduced because Anne had received Severe Disablement Allowance.
STEVE WEBB ANSWERS YOUR PENSION QUESTIONS
Why did DWP falsely say my mum, 90, was owed £60k?
Former Pensions Minister Steve Webb has investigated two similar cases on behalf of readers who wrote in to his This is Money column this year.
One person received a letter saying their father who died aged 100 had been underpaid state pension for 20 years, but then heard nothing more from the DWP for six months.
After Webb intervened, our reader inherited their father’s state pension backpayment of just under £8,000. The DWP apologised for the delay.
In a second case, a 90-year-old widow had a letter last December saying she might be owed arrears.
When one of her daughters made numerous calls to chase it up over the following five months, she was given wildly different estimates by DWP staff of the amount involved.
On one occasion she was told £24,000, on another £60,000 and perhaps higher, and on another £400 – causing her elderly mother confusion and distress.
Webb finally confirmed the sum owed was £438, and a DWP spokesperson said: ‘We are very sorry for the errors handling this case and for the service received by your reader.’
Webb, who is now a partner at pension consultant LCP, says: ‘When the DWP thinks it has found money which is owed in state pension arrears, it has a duty to progress things rapidly.
‘Sending people letters which raise their hopes and then leaving them in limbo for months is simply cruel.
‘And yet again there seems no way to penetrate the bureaucracy to speak to someone who can actually tell you what is going on.
‘When people respond to these letters there needs to be a streamlined process to come to a final decision and pay what is due, not simply put them to the back of a new queue.’
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