How many people will be affected?
The scale of this issue was highlighted by the National Audit Office (NAO). Its review found around 134,000 pensioners across the UK received underpaid state pensions, amounting to an estimated £1billion in total. This equates to around £8,900 per affected claimant.
Some 94,000 of those affected by this are still alive and as such, should receive what they’re owed but unfortunately, this leaves 40,000 people who could have died before receiving their full payments.
According to the DWP’s own findings, underpayments range between £0.01 and £128,448.37, with the earliest going back to 1985. This means some retirees could be in for a substantial income boost.
Following the emergence of the issues, a number of experts warned it would be damaging to the Government’s reputation and trust would need to be rebuilt with the DWP.
Andrew Megson, the Executive Chairman of My Pension Expert, commented: “This has to be a wake up call for the Government, as well as the entire pension sector.
“Both parties have been complicit in allowing layer upon layer of regulation to isolate consumers from their pension, which we all know has led to a widening pension engagement gap — recent research from My Pension Expert found 46 percent of UK pension holders had not checked on their retirement finances within the previous 12 months.