The state pension underpayment rate was 0.6% in 2022/23, the highest underpayment rate on record, with £670m underpaid during the year, the Department for Work and Pensions (DWP) has revealed.

This compares to 0.5%, or £540m, in the previous financial year.

“Official error” was the main cause of underpayment on the state pension, according to the DWP.

Errors relating to the department failing to take action on changes to marital status or at age-related trigger points remained the main source of official error underpayments, at 0.3% in both 2021/22 and 2022/23.

The main types of underpayments in this category in 2022/23 were married people who reached state pension age before April 2016 and may be entitled to a state pension uplift, and people who have been widowed and their state pension was not uplifted to include amount they were entitled to inherit from their late partner.

Errors relating to the incorrect recording of a claimant’s National Insurance contributions remained the second largest source of official error underpayments at 0.1 per cent, although this is down from the 0.2% in 2021/22.

Underpayments due to claimant error increased from £10m in 2021/22 to £90m in 2022/23.

“State pension underpayments hit a high with an eye-watering £670m underpaid in the financial year end of 2023,” commented Hargreaves Lansdown head of retirement analysis, Helen Morrissey.

“This perhaps comes as no surprise given the huge exercise the DWP is undergoing to correct historical errors that meant many people, did not receive uplifts to which they were entitled.

“This primarily affected women retiring under the basic state pension system who were due uplifts in their pension when their husbands retired or died. Many of these underpayments go back years and amount to thousands of pounds.

“Government is making headway in making these repayments, but the scale of the problem is vast, and it will take time to complete but in the meantime many of these people have been under financial strain that they didn’t need to be.”


This article first appeared on our sister title, Pensions Age.

Share Story: