UK retirees have lost more than £ 1 billion in payments, it has been reported.
According to a national audit, the underpayments are due to the failure of the Ministry of Labor and Pensions to provide the state pension.
The National Audit Office (NAO) said that due to consecutive human error, complex rules, and outdated IT systems, people lost money that they had worked for all their lives.
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The Department of Labor and Pensions (DWP) estimates it has underpaid 134,000 retirees and those it can prosecute will get back an average of £ 8,900, the Spiegel reports.
The real value of the underpayments will not become clear until the DWP completes its review of all cases, the guard added, and most of those affected are likely women.
Steps will be taken to make the payments owed.
An estimated £ 339 million goes to retirees who should have benefited from their spouse’s or domestic partner’s National Insurance (NI); £ 568 million to widows and widowers who should have inherited more state pension rights from their deceased partner; and £ 146 million for retirees who should have received an increase in their pension on their 80th birthday.
Meg Hillier, Chair of the Public Finance Committee, said: “Many retirees – most of whom are likely women – have lost thousands of pounds that they are still receiving many years later.
“While it is positive that DWP is now working to correct this, this is not the first widespread mistake we’ve seen at DWP in recent years. Correcting these errors is very costly for the taxpayer.
“DWP urgently needs to remedy those affected and take real measures to avoid similar mistakes in the future.”
How it happened
The National Audit Office said the errors occurred because pension legislation is unnecessarily complex, IT systems are out of date and not automated, and managing applications requires a high level of manual review and understanding by case workers.
“This makes a certain amount of error in the processing of pension claims almost inevitable,” added the NAO.
Case workers have often failed to put manual IT system prompts on retirees’ files and act later to review payments at a later date, such as when people have reached statutory retirement age or their 80th birthday, it said.
The results found that frontline workers found the instructions difficult to use and had no training on complex cases.
The department still has no way of reviewing individual complaints or errors, e.g. B. How many people complain about the same problems in order to assess whether the errors have a systemic cause.
Quality assurance procedures have focused on reviewing changes to case details, such as a change of address or the death of a spouse, rather than the overall accuracy of payments, the NAO added.
Who is affected and how did the problem become known?
The errors affect retirees who first received the state pension before April 2016, do not have a full NI record and should have received certain increases in their state basic pension.
They were brought to the department’s attention by individual retirees, concerned experts and the media, the NAO said.
The DWP began investigating the “potential for error” in April 2020 and confirmed in August 2020 that there was a significant problem.
She has started reviewing cases in January 2021 and will reach out to retirees if she finds they are underpaid.
Will the problem be solved?
The DWP began investigating cases where there was a risk of underpayment in January this year.
The exercise was originally supposed to take more than six years to complete, but following the decision to hire additional staff, the department changed the completion date to late 2023.
Between January 11 and September 5, 2021, the department reviewed 72,780 cases of underpayment risk or who had contacted it to see their payment and paid a total of £ 60.6 million in arrears to 11% of them Cases.
The department prioritizes people who fall into risk categories, such as widows or people over 80.
The office does not know how many deceased pensioners are underpaid, as for data protection reasons it generally does not keep records for more than four years after the death of a pensioner and, in the case of married couples, also of the spouse, according to the report.
As of August 2021, the ministry had not approved a formal plan to find the estate of deceased pensioners.
What the National Audit Office said
Gareth Davies, director of the NAO, said: “The impact of the underpayment of the state pension on the affected retirees is significant.
“It is vital that the Department of Labor and Pensions corrects past underpayments and makes changes to avoid similar problems in the future.”
Campaign of the former pension minister
The report said Sir Steve Webb, a former pension secretary, and ThisIsMoney.co.uk provided the DWP with examples of underpayments.
Sir Steve, partner at LCP (Lane Clark & Peacock) consultancy, said, “This report highlights the fact that DWP has failed to respond for many years when errors were found in assessing state pensions.
“Tens of thousands of married women, widows and those over 80 have been underpaid, with arrears in some cases in excess of £ 100,000.
“It is very worrying that there are still errors being made in corrective action that should be handled by the highest standards of quality control.
“DWP must also do everything it can to track down the families of retirees who have sadly passed away and who have never received the pension they are entitled to.
“We now need full transparency from DWP about the correction process, with regular updates and a full explanation of exactly which cases are being reviewed.
“It should also explain how these mistakes were allowed to continue for so long and what lessons were learned from them.
“There also needs to be a clear plan to help families where the person who was underpaid died more than four years ago and the DWP is no longer keeping records.”
Mostly women affected
It is believed that around 90% of those affected are women.
Of 134,000 cases, about 94,000 are still alive and about 40,000 have died, and payments to estates could be made.
The DWP has identified around 15,000 cases where it is considered unlikely to trace the retiree or heirs.
A DWP spokesman said: “We are fully committed to ensuring that the historical mistakes made by successive governments are corrected and, as this report recognizes, we are devoting significant resources to doing so. We will contact everyone concerned to ensure that they receive everything they are entitled to.
“Since we became aware of this problem, we have introduced new quality control processes and improved training to ensure that this does not happen again.”
What to do if you think your state pension is wrong
You can check the amount of your salary by checking your bank account or annual pension statement.
If you think you have missed out on your retirement, there is an online tool that you can use here to get more clarity.
It was started by Sir Steve Webb, the former Secretary of Pensions.
If you feel that you have not received the correct state pension for any other reason, you should contact DWP’s pension service directly.
You can call 0800 731 0469, but note that lines are only open Monday through Friday from 9:30 a.m. to 3:30 p.m.
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