State Pension underpayments: progress on cases reviewed to 30 September 2021
Published 22 October 2021
Applies to England, Scotland and Wales
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This publication is available at https://www.gov.uk/government/publications/state-pension-underpayments-progress-on-cases-reviewed-to-30-september-2021/state-pension-underpayments-progress-on-cases-reviewed-to-30-september-2021
The latest release of this information can be found in the collection of State Pension underpayments: progress on cases reviewed.
This publication is classified as management information. These documents are published in the interest of transparency and are not part of our regular Official and National Statistics publications.
1. Policy background
People who reached State Pension (SP) age before April 2016 can claim basic State Pension. To get the full basic State Pension of £137.60 (at April 2021 rates), an individual needs a total of 30 qualifying years of National Insurance (NI) contributions or credits. When someone has less than 30 qualifying years, their basic State Pension will be less than this amount. There were different rules in place for those who reached State Pension age before 6 April 2010.
If an individual has insufficient NI contributions themselves to qualify for a basic State Pension of £82.45 a week (at April 2021 rates), they may be able to derive entitlement from their spouse or civil partner (called a Category BL State Pension). This may give them a basic State Pension of up to £82.45 a week (at April 2021 rates).
Those who are widowed, and are getting a basic State Pension of less than £137.60 a week (in April 2021 rates), can also derive basic State Pension from their late spouse or civil partner. This may give them a basic State Pension of up to £137.60 a week. They can also inherit between 50% and 100% of any additional State Pension and 50% of any Graduated Retirement Benefit.
People who reach age 80 and are getting no basic State Pension or a basic State Pension amount of less than £82.45 a week, may qualify for a Category D State Pension of £82.45 a week.
In 2020, the Department for Work and Pensions (DWP) became aware of a number of married / widowed and over age 80 individuals who had not, as it should have been in accordance with the law, had their State Pension increased automatically. This prompted the department to take action to investigate the extent of the problem.
From the 11 January 2021, the department commenced a Legal Entitlements and Administrative Practice exercise (LEAP) to identify those individuals who have been underpayment State Pension in accordance with the law, and pay any arrears they are owed.
Analysis of September 2020 administrative data identified the number of women receiving less than 60% of the full basic State Pension.
| Marital Status | Number of women receiving pre-2016 State Pension | Number of these receiving < 60% (Frozen-rate cases not included) | ||||
|---|---|---|---|---|---|---|
| GB only | Total | GB only | Total | |||
| Married / in Civil Partnership | 2,655,000 | 2,835,000 | 120,000 | 237,000 | ||
| Widowed | 1,935,000 | 2,036,000 | 21,000 | 75,000 | ||
| Divorced / Annulled | 688,000 | 720,000 | 24,000 | 40,000 | ||
| Single | 323,000 | 360,000 | 18,000 | 47,000 | ||
| TOTAL | 5,602,000 | 5,952,000 | 183,000 | 400,000 |
Source: QSE September 2020
2. Administrative exercise
On 11 January 2021, DWP began an administrative LEAP exercise to identify and correct cases where customers have been underpaid in accordance with the law. The checking process began on 11 January 2021 and is expected to be complete by end 2023.
3. What you need to know
The correction activity will identify cases where individuals have been underpaid in accordance with the law. These cases can be categorised into the following groups:
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people who are married or in a civil partnership who reach State Pension age before 6 April 2016 and may be entitled to a Category BL uplift, without the need to make a separate claim, based on their husband, wife or civil partner’s National Insurance contributions. This may be the case if their husband, wife or civil partner became entitled to their State Pension on/after 17 March 2008, or had already reached State Pension age prior to the customer claiming their State Pension
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people who have been widowed and their State Pension was not uplifted to include amounts they are entitled to inherit from their late husband, wife or civil partner
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people who have not been paid Category D State Pension uplift as they should have been from age 80
Where underpayments are identified, the department will contact the individual to inform them of the changes to their State Pension amount and of any arrears payment they will receive. Individuals do not need to do anything.
This activity will not identify cases where the individual is obliged to notify the Department of any change in circumstances that may affect their entitlement to State Pension, such as married women whose husband became entitled to his State Pension prior to 17 March 2008 and therefore have to claim Category BL State Pension; and those State Pension recipients who become divorced/civil partnership dissolved and may be entitled to an increase in State Pension, if they notified the department of this change, through their ex-spouse’s or civil partner’s National Insurance record.
4. Purpose of the release
This analysis is published for the purpose of transparency and accountability.
It includes information on the progress of the exercise to check and correct individual cases, and the amount of arrears repaid to date.
OBR’s estimates of the total number of underpayments and the forecast expenditure over the entirety of the exercise will be included in OBR’s Autumn Budget publications.
5. Progress so far
Between 11 January and 30 September, the checking process has identified 9,491 underpayments, owed total of £60.8m.
| Category | Cases reviewed (see note 1) | Underpayments identified (see note 2) | Average arrears payment (see note 3) | Total amount repaid |
|---|---|---|---|---|
| Married (Cat BL) | 25,990 | 2,681 | £7,772 | £20.8m |
| Widowed | 6,467 | 2,381 | £8,628 | £20.2m |
| Over 80 (Cat D) | 6,050 | 4,429 | £4,455 | £19.7m |
Notes.
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Cases may be checked for more than one potential cause of error; therefore, an individual State Pension claim may be counted in more than one category.
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These are cases for which a current or historical underpayment of State Pension has been identified. This may include cases for which a corresponding overpayment of another benefit (for example, Pension Credit) has occurred as a result, meaning that there was no net underpayment to the individual as well as some cases where the customer is deceased and the department has so far been unable to identify an estate to which to pay the arrears due.
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This average includes cases where the arrears amount owed is £0 due to offset of overpaid benefit.
| Month | Underpayments Identified |
|---|---|
| January 2021 (11/01/2021 to 31/01/2021) | 275 |
| February 2021 | 823 |
| March 2021 | 1242 |
6. Statement of compliance with the code of practice of statistics
The Code of Practice for Statistics (the Code) is built around 3 main concepts, or pillars:
- trustworthiness – is about having confidence in the people and organisations that publish statistics
- quality – is about using data and methods that produce statistics
- value – is about publishing statistics that support society’s needs
The following explains how we have applied the pillars of the Code.
Trustworthiness
Progress on the SP LEAP exercise is based on DWP management information supplied through:
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Individually reviewed cases to find customers that have been underpaid and the amount they are owed, and to learn why they have been underpaid.
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The departments computer system that holds alive and deceased state pension cases, and any live state pension records from the system used before it.
Quality
DWP analysts have engaged with operational staff to ensure the quality of the data is fit-for-purpose, and have analysed data to help understand the customers most likely to have been underpaid, whilst offering robust sense check on values against other outputs for comparable periods.
Correction rates and arrears amounts are likely to change as the exercise progresses, due to varying characteristics of the individuals affected and recruitment of additional staff to correct cases.
Value
This release provides a progress update on the State Pension LEAP exercise, together with context for those figures. In addition, it aims to reduce the administrative burden of answering Parliamentary Questions, Freedom of Information requests and ad hoc queries to ensure timely responses to public queries.
To support financial planning and management of departmental business, figures have been seen in advance by ministers and officials. This is in line with the Code, where pre-release access does not apply for releases based on routine management information – as covered in para 3.6 of the National Statistician’s guidance, February 2018.
7. Contact information
The Department for Work and Pensions are identifying customers who have been underpaid State Pension in accordance with the law.
If we identify you have been underpaid, we will let you know of the changes to your State Pension and any arrears due. Please be patient as this may take some time.
Contact the Pension Service if you are:
- a married woman and your husband claimed his State Pension before 17 March 2008
- you are aged over 80 and either not receiving any State Pension or are receiving Graduated Retirement Benefit only
- you are acting on behalf of a State Pension customer who is deceased and may have been underpaid State Pension
- you are divorced and want to know how this exercise affects your State Pension
State Pension
Find out more about State Pension eligibility, claims, payments and complaints.
Contact the Pension Service to ask questions you have related to your State Pension.
Statistics enquiries
For statistics enquiries only, email: statepensioncorrectionexercise.managementoffice@dwp.gov.uk.
This email address is unable to provide any information or assistance with questions about your State Pension.