DWP have today published their annual report for 2021/22 which includes two dramatic sections on state pension errors.

Last year’s annual report estimated that around 134,000 people had been underpaid state pensions worth around £1 billion in arrears.  Today’s report says that further scans have shown that the number affected is closer to 220,000 and the bill will run to over £1.3 billion – see table:

Source: DWP Annual Report page 287

In addition, the annual report admits for the first time to an error whereby credits for time at home with children (previously known as ‘home responsibilities protection’) may be missing from people’s NI records.  These credits can have a very substantial impact on people’s state pension entitlement, and the majority of those affected will be women.  Steve Webb first raised this issue with DWP in 2008 and a correction exercise was undertaken which eventually refunded around £35m.  However, DWP have now admitted ongoing problems are being investigated with HMRC, though is unable to assess the scale of the problem.  This is an excerpt from the annual report:

Source: DWP Annual Report p71

Commenting, Steve Webb, partner at LCP said:

“DWP’s annual report reveals a shocking level of error in state pension payments.  Not only is the cost of the underpayment correction exercise set to soar, DWP are now admitting a whole new category of errors.  In both cases it is women who will bear the brunt of the errors.  We need much greater transparency about all of this rather than leaving it to figures buried in the small print of annual reports.  Far too many people have been underpaid for far too long”.