National Audit Office reveals DWP’s “almost inevitable” errors in calculating your pension as £1 billion is owed to 134,000 pensioners

Woman pensioner. pic credit: Which?

A highly critical National Audit Office report today exposes major shortcomings in the running of the country’s state pension system.

With some 12 million people relying on the Department for Work and Pensions to calculate their pension accurately the auditors reveal a sorry picture of outdated IT systems, civil servants reduced to making manual calculations and mistakes galore with no proper system to identify the errors in the first place.

The NAO investigation was triggered when former pensions minister Liberal Democrat Sir Steve Webb and Tanya Jefferies of, last year started to refer a number of cases to the Department of women who had been underpaid. On 26 May 2020 Sir Steve published an estimate of the level of underpayments using the
information obtained from the Department combined with public information from the Family Resource Survey that at least 220,000 women had been underpaid including 131,000 married women, 56,000 widows and 35,000 divorcees.

90 per cent of the losers are women

Now the department has admitted that 134,000 people have indeed been given underpaid pensions and it will cost £1.053 billion to compensate them. This figures excludes those who have already died because the department wipes them from its records after four years

Once again 90 per cent of them are women, and only 10 per cent men.

What is particularly alarming is the summary in the report about the whole pensions system.

It says: ” The errors occurred because State Pension rules are complex, IT systems are outdated and unautomated, and the administration of claims requires a high degree of manual review and understanding by case workers. This makes some level of error in the processing of State Pension claims almost inevitable.

The Department’s caseworkers often failed to set (and later action) manual IT system prompts on pensioners’ files to review the payments at a later date, such as their spouse reaching State Pension Age or their 80th birthday. Caseworkers also often made errors when they did process prompts because frontline staff found instructions difficult to use and lacked training on complex cases.

Worse the department seem to have a top down approach to find out about errors – rather than a bottom up from the pensioners themselves who might challenge their pension awards. Therefore it never picks up a large volume of similar complaints.

Wrong assumption that there are no errors

As a result there always been the assumption – and it was taken until now by the National Audit Office- that there was virtually no fraud or error in the payment of the £100 billion plus to pensioners every year. This has now been proved wrong.

The ministry is recruiting 544 people – at a cost of £24.3 million – to chase up and pay out the money to people who have lost out. But it is going to take some two years to do this with priority being given to the over 80s and widows. It has no plan on how to compensate relatives of dead pensioners owed money- and the NAO think it should create one.

Meg Hillier MP

Meg Hillier MP, Chair of the Committee of Public Accounts, said

“Many pensioners – most of whom are likely to be women – have been short-changed by thousands of pounds which they are still yet to receive many years later.

DWP must provide urgent redress to those affected and take real action to prevent similar errors in future.”

A DWP spokesperson said:

“We are fully committed to ensuring the historical errors that have been made by successive Governments are corrected, and as this report acknowledges, we’re dedicating significant resource to doing so. Anyone impacted will be contacted by us to ensure they receive all that they are owed.

“Since we became aware of this issue, we have introduced new quality control processes and improved training to help ensure this does not happen again.”

Fourth pensions scandal to hit DWP

However one must comment that this is the fourth scandal to hit the DWP over the payment of pensions and women are by far the worst treated. First we had the 3.8 million 50swomen not being properly informed about the raising the pension age which the Ombudsman has found there was maladministration. Then we had the complicated story of people losing their guaranteed minimum pension uprating which could affect 11 million people, mainly women. Again the Ombudsman found maladministration but only two people have been compensated. And now we are also having delays for people claiming their pension for the first time in getting paid.

Cynics might conclude the ministry is almost misogynist in its approach – and also all these delays is ensuring more people -particularly in the age of Covid- will be dead before they get the money that is owed to them.

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7 thoughts on “National Audit Office reveals DWP’s “almost inevitable” errors in calculating your pension as £1 billion is owed to 134,000 pensioners

  1. 1956 woman. On UC for 3 years. Due to start work for DWP next week on fixed term contract as work coach. I’m 65 this December. I’m getting my pension very gradually, & by stealth 😀 Thanks for your continued work, David. Happy to pay for it. Best wishes to you & yours.


  2. I doubt it was a mistake….bet plenty got bonuses out of this! Same with that IR35 thing…..

    It’s not just pensions either. It’s the whole ‘benefits pot’…system is so easy to defraud from the inside. Owed well over 15 years myself now…but they won’t even acknowledge that I exist!


  3. What I find frustrating is that these days the only way to try to sort things out with bodies like DWP and HMRC is to telephone. That usually involves hours on the phone to get through and then invariably you can’t get things in writing to confirm how decisions are made. Perhaps I am old-fashioned. I hanker for the days when things were done by letter. I never did get an answer to my query. I do not get a full pension as I only paid National Insurance contributions up to 30 years. That is how much DWP had told me I needed to pay – I lived and worked abroad for many years often as a volunteer – but the scheme was changed for my age group. I do accept that in principle people who have paid in more years of contributions do deserve more. It’s just that I was not given the chance to do so when I could, and once retired I could not afford to pay for the extra voluntary contributions for the full pension. My wife is foreign so we both live on my single pension. Fortunately it’s topped up by my private pensions. Great work David on behalf of many people.


    • I’m the same! and i’m mid 40s…..ALWAYS in writing and that does mean with an actual signature….as they just blatantly lie on what was agreed and said over the telephone. Been that way since early 20s….quickly learnt my lesson on that coming into the ‘real world’ after leaving uni….

      Trouble is these anons just refuse to do so, claiming instead it is actually cheaper for them to waste 100 000s if not millions on pointless court cases to target an individual and bankrupt them. Judges seem to think this is acceptable behavior…and private companies have adopted the same ‘policy’.

      Fact is I only have ever seen an actual signature from g-men twice in my life! One was on a letter from the GMC claiming that none of the people that actually tortured me for the best part of 2006 are on the medical registrar. The second was on a letter from Keir Starmer. Threatening to put the survivors of the worst kind of sexual abuse you can imagine in prison for years for having the audacity to ask him to the job he was actually being paid to do as director of prosecutions. They don’t even need to bother with things like trials or juries anymore, or even bother to accuse their victims of anything. I still have the impression that the vast majority in this country have absolutely no idea of the country they’re living in now! You don’t know until it happens to you….


    • John. I share Jake’s comment. I have always worked to the saying “If it’s not on paper, it doesn’t exist”. Always in writing, keep a copy and that way, you can’t be subject to the ‘paperwork not received/gone missing’ arguments which are frequently used by establishment bodies. Take note that most bodies, including government ones now want to receive communications digitally. For the cost of postage, I prefer to send it and obtain a certificate of posting.

      By the way. Where does the law say we all have to have a telephone or an e mail. I know people who don’t have either. Some don’t on principal stating why should they fork out for the line/wi-fi cost for the convenience of others. Mostly the older generation, I grant you, but they do have a point.

      This DWP scandal should never have happened. However, this department is not alone in maladministration. It is rife in public service and, as a nation, we deserve better standards.


  4. Do you realise how upsetting it is to go through your deceased parents files while battling cancer issues.
    Feeling ill from Chemo.
    Beyond belief..


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