As many as 134,000 pensioners, many of them women, lost out because of calculation errors by the Department for Work and Pensions.
Although refunds have been offered, an unknown number have died without receiving what they were owed, it was claimed. Fixing the mistakes will cost the taxpayer as much as £24million in staff costs alone by the end of 2023, MPs on the Public Accounts Committee found.
In a report full of criticism of the DWP, which found errors going back to 1985, committee chairwoman Dame Meg Hillier said: “Departments that make errors have a duty to put those it wronged back in the position they should have been, without the error.
“DWP can never make up what people have actually lost, over decades, and in many cases it’s not even trying.
“An unknown number of pensioners died without getting their due and there is no current plan to pay back their estates. This is a shameful shambles.”
Former pensions minister Sir Steve Webb said: “Many thousands of people have missed out on potentially life-changing amounts of money.”
Complex pension rules and a reliance on manual systems led to the underpayment of the pensioners, the
PAC report said. Widows, divorcees and women who rely on their husband’s pension contributions for some of their own pension were worst hit.
A DWP spokesman said: “Resolving the historical state pension underpayments is a priority for the department.
“Those affected will be contacted to ensure they receive all they are owed.”
I got a £9k refund after being underpaid
Lynda Hallaway was refunded a lump sum of more than £9,000 after her husband John queried why his wife was receiving such a small pension.
Lynda, 74, was getting just £57 a week in April 2020, despite John, 73, reaching pension age in 2012.
But she then got her pension boosted to almost £81, plus a back payment of £9,160. The mother of two, from New Ellerby, near Hull, said: “I had no idea my pension was being underpaid and it was only by chance that my husband heard about this issue.
“I would encourage any woman who thinks her pension is being underpaid to get it checked.”
When Lynda retired, she drew a state pension in her own right, but because of time spent bringing up the family she was only entitled to a modest amount.
She had heard about pensionage women missing out, so John put her details into a calculator on pension firm LCP’s website and found she was being underpaid.
She phoned the Pension Service and when they called back, they asked: “Are you sitting down?”, as she was due a rise to £80.45 per week as well as the refund.