‘Biggest benefit scandal of all time’ as DWP owes | European Markets

‘Biggest benefit scandal of all time’ as DWP owes | U.Ok.Finance News

Between 11 January 2021 and 31 March 2025, the federal government stated it had recognized 130,948 state pension underpayments, owing pensioners an quantity getting on for what consultants estimate could also be as a lot as £1 billion.The historic correction train began in March 2021 when the Department for Work and Pensions (DWP) started checking tons of of hundreds of pension information to ascertain if pensioners have been underpaid The Office for Budget Responsibility has beforehand estimated the correction train may ultimately value the DWP virtually £3 billion.The DWP has confirmed to the Work and Pensions Committee that they’ve accomplished the overwhelming majority of critiques, however are nonetheless ready for people to contact them with info which means the train gained’t be totally accomplished till March 2027Rachel Vahey, head of public coverage at AJ Bell, stated: “This is one of the biggest benefit scandals of modern times. DWP miscalculations have left thousands of pensioners – mainly women – short on their state pension payments. “The DWP has obviously been hard at work over the last six months, identifying another 11,000 cases of underpayment, which has ratcheted the bill up from £736 million to a staggering £805 million today. “But despite this progress, this appalling situation is not yet resolved. The DWP has confirmed they have completed the vast majority of reviews, but it will take another two years, to the end of March 2027, before all cases are resolved.“It is absolutely critical all those affected by this scandal receive the money they are owed as quickly and efficiently as possible. The DWP is calling on customers to provide additional information to put an end to this sad episode. But that relies on these people getting online and engaging with the DWP. You can check if you’ve been underpaid and whether you need to make a claim by contacting the Pension Service. “Once all compensation has been paid, the government needs to undertake a comprehensive review of its processes to ensure these mistakes are never repeated. Trust in pensions is fragile at the best of times and failures such as this will not help. Sadly, it will likely take years, if not decades, to rebuild the confidence lost as a result of this scandal.”The scandal of state pension underpayments pertains to those that ought to have been entitled to uplifts underneath the pre-2016 system, however on account of administrative errors didn’t obtain them. These errors have been discovered so far back as far as 1985.The fundamental people more likely to have been underpaid their state pension embrace:

Pensioners who’re receiving a low primary state pension of their own proper, however are entitled to increase it utilizing their residing partner or civil associate’s contributions as soon as their associate turns into entitled to state pension (these are additionally known as ‘Category BL’ pensioners);

Widows and widowers who aren’t entitled to a full primary state pension primarily based on their own contributions however who’ve inherited a primary state pension from their partner or civil associate up to the total primary state pension fee;

Men and girls beforehand receiving no or low quantities of primary state pension, who could possibly increase their state pension from age 80 (additionally identified as Category D pensioners).

A DWP spokesperson stated its precedence is making certain pensioners obtain the dignity and security they deserve in retirement and that State Pension underpayment charges stay as low as potential.They stated: “We have now completed the vast majority of cases in the exercise as planned with a small number of outstanding cases due to further documentation needed from the customer.”

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