Thousands of pensioners across the UK have been underpaid a staggering £804.7 million in state pension benefits, according to the latest update from the Department for Work and Pensions (DWP). Since launching a nationwide review in January 2021, the DWP has identified nearly 131,000 underpayment cases — with some individuals owed as much as £12,000.
Massive Shortfall in Pension Payments
Between January 2021 and March 31, 2025, the DWP flagged 130,948 cases where pensioners were paid less than they were entitled to. While some individuals were overpaid in other benefits, including pension credit, many underpaid recipients have gone without for years — and in some tragic instances, died before receiving what they were owed.
In certain cases, the DWP has struggled to trace next of kin, meaning some estates have yet to be compensated.
Who’s Affected?
The underpayments have disproportionately affected:
- Married women who did not receive the correct uplift after their husband retired
- Widows and widowers whose pensions weren’t recalculated after a spouse’s death
- Over-80s, particularly those whose entitlements were never automatically increased
The DWP also revealed that many underpayment cases fall into multiple categories due to compounding administrative errors.
How Much Are People Owed?
According to DWP figures, the average arrears vary depending on the category:
- Widowed pensioners: £11,725
- Married women (Category BL): £5,553
- Over-80s (Category D): £2,203
In addition, a correction project addressing missing periods of Home Responsibilities Protection (HRP) — an element that impacts pension calculations — has already uncovered 5,344 cases worth £42 million in unpaid funds as of September 2024.
Calls for Urgency
Former pensions minister Sir Steve Webb, a leading voice in exposing the scale of these errors, called for immediate action.
“These corrections need to be handled with urgency. This should never have happened in the first place,” Webb said, adding that many affected women were underpaid for decades or died before the problem was discovered.
Industry Reaction
Rachel Vahey, head of public policy at AJ Bell, labeled the revelations one of the “biggest benefit scandals” of modern times.
“Thousands of pensioners — especially women — have been shortchanged,” she said. “It’s crucial the DWP acts quickly and fairly to put things right.”
What Is the DWP Doing Now?
A DWP spokesperson responded by emphasizing their commitment to “ensuring pensioners receive the dignity and security they deserve in retirement.”
They added that most cases have now been resolved, with only a small number still under review due to outstanding paperwork.