Tens of thousands of UK pensioners have been affected by a widespread underpayment crisis, with the Department for Work and Pensions (DWP) confirming that over £804.7 million in state pension entitlements were missed. Since launching a formal review in January 2021, more than 130,000 cases have come to light—many involving vulnerable individuals such as married women, widows, and those over age 80.
While the DWP is actively correcting the errors, experts warn that some may still be missing out. Pensioners and their families are urged to review their records and take steps to ensure they are receiving their full entitlements.
The Scale of the Pension Underpayment Crisis
The underpayment issue, ongoing from January 11, 2021, to March 31, 2025, has uncovered deep-rooted flaws in the UK pension system. Administrative oversights, outdated procedures, and failures to adjust pensions following life events have led to a staggering 130,948 underpaid cases, totaling more than £800 million in arrears.
Some individuals are owed up to £12,000, and tragically, many affected pensioners have passed away—meaning that in certain cases, estates may not be able to recover the lost payments.
Who Has Been Affected?
The majority of underpayments fall into three main categories:
1. Married Women (Category BL)
- Affected when their pension wasn’t automatically increased after their husband reached state pension age.
- Entitled to 60% of their husband’s basic pension, many remained on a lower individual rate due to DWP errors.
2. Widowed Pensioners
- Pensioners whose entitlement wasn’t properly recalculated after their spouse’s death.
- In many cases, they were due increased payments from their deceased partner’s pension.
3. Individuals Over 80 (Category D)
- Pensioners entitled to a non-means-tested increase at age 80.
- Many did not automatically receive this boost despite qualifying under UK pension rules.
Some individuals may fall into more than one category—resulting in higher cumulative underpayments.
How Much Are People Owed?
The DWP has released data showing the average amounts owed by group:
| Group | Average Arrears |
|---|---|
| Widowed Pensioners | £11,725 |
| Married Women (Category BL) | £5,553 |
| Over 80s (Category D) | £2,203 |
In addition, Home Responsibilities Protection (HRP) errors—which relate to parents and carers who qualified for NI credits—led to 5,344 underpayment cases worth £42 million, as of September 2024.
Experts Demand Urgent Action
Former pensions minister Sir Steve Webb has been a key figure in exposing the crisis. He criticized the DWP’s historic inaction, highlighting that some women were underpaid for decades or died without ever receiving their full entitlements.
Financial analyst Rachel Vahey of AJ Bell described the scandal as one of the biggest benefit failures in years, urging the government to speed up payments and review the system’s reliability.
DWP’s Response
In an official statement, the DWP acknowledged the severity of the issue and emphasized that:
- Most cases have been resolved and compensation paid.
- A smaller number remain under review, often due to missing records or complex personal histories.
They reiterated their commitment to ensuring affected pensioners receive the financial security and respect they deserve.
What You Should Do If You Think You’re Affected
If you or a family member falls into one of the affected categories, you may be entitled to back payments. Here’s what to do:
- Review your pension records – especially if you’re a widow, married woman, or over 80.
- Contact the DWP Pension Service – request a formal review of your entitlement.
- Gather documentation – include your spouse’s pension details, death certificate (if applicable), and any National Insurance records.
- Seek help – Organizations like Age UK and Citizens Advice can offer support in checking eligibility and navigating the process.
The DWP pension underpayment crisis has spotlighted serious flaws in the UK’s retirement system, affecting tens of thousands of individuals—many of whom relied on these payments for basic needs. While the government continues to address the backlog, the sheer scale of the issue demands continued scrutiny, faster processing, and long-term reform.
Anyone who suspects they or their loved ones might be owed money should act swiftly to ensure they receive what they are entitled to.
FAQs
How do I know if I’ve been underpaid?
Check if you fall into any of the affected groups: married women, widowed pensioners, or individuals over 80. Contact the DWP for confirmation.
Will I automatically receive a refund if I’m owed money?
Not necessarily. While the DWP is reviewing cases, errors may still go unnoticed. It’s recommended to request a personal review.
How long will it take to receive arrears?
It varies. Some cases are straightforward; others involve complex documentation or require deeper investigation.
