State Pension Underpayments: DWP Repays £804.7m to Affected Individuals
The Department for Work and Pensions (DWP) has repaid £804.7m to individuals impacted by historical state pension underpayments as of 31 March 2025, having identified 130,948 underpayments, according to a recent update. The problems affected married women whose husbands reached pensionable age before 2008, as well as widows and those over 80, who were unknowingly entitled to an ‘enhanced pension’ that would have boosted their payments by up to 60 per cent.
The latest figures, reported by Pensions Age, reveal that the DWP has reviewed 877,508 cases between 11 January 2021 and 31 March 2025, identifying a total of 130,948 underpayments. In particular, a total of £252.8m had been repaid to the 47,004 cases involving married women, with an average arrears amount of £5,553, while a total of £483.4m had been paid in relation to the 50,261 widowed cases, with an average £11,725 payment.
Furthermore, £68.5m was repaid in relation to 33,683 cases involving over 80s, with an average payment of £2,203. The government has stated that it is making "good progress" on the state pension correction exercise and is on track to resolve all remaining state pension underpayment cases by the end of March 2027.
However, this bill could be set to rise higher, as LCP partner, Steve Webb, pointed out that the government is also currently undertaking a second correction exercise, which relates to missing ‘Home Responsibilities Protection’ (HRP) on the NI record of mothers who had children before the year 2000. Webb warned that the amounts paid out under the current HRP exercise are expected to rise sharply as it gathers momentum, with another update to end March 2025 expected shortly.
As a result, he suggested that it is highly likely that the total amount underpaid will rise from the current £929m to pass the £1bn mark in the next year. “We have become so used to stories about state pension errors that it is easy to become dulled to the scale of what went wrong," Webb stated. "It now looks as though the total amount underpaid will pass through the £1 billion mark this year with over 170,000 people having lost out. The vast majority of those who lost were women, some of whom were underpaid for decades or even went to their grave never paid the right state pension. The remaining corrections need to be handled as a matter of urgency. This should never be allowed to happen again”.
The DWP’s efforts to rectify the state pension underpayments have been ongoing since 2021, with the department working to identify and correct the errors. As Pensions Age previously reported, the issues surrounding state pension underpayments have been attributed to a lack of awareness and incorrect information being provided to those entitled to the enhanced pension.
The latest update on the state pension underpayments has raised concerns about the scale of the problem and the impact on those affected. As the government continues to work towards resolving the remaining cases, it is clear that the issue of state pension underpayments will remain a significant concern for those affected and for the government.
In response to the ongoing issues, the DWP has urged individuals who believe they may have been underpaid to contact the department to discuss their case. As the correction exercise continues, it is essential that those affected are aware of their entitlements and take steps to ensure they receive the correct payments.
The Pensions Age report highlights the need for greater awareness and understanding of the state pension system, particularly for those who may be entitled to enhanced payments. As the government works to rectify the underpayments, it is crucial that individuals are proactive in seeking information and support to ensure they receive the correct state pension payments.
Source: Pensions Age – Over £800m repaid to address state pension underpayments.
