Thousands may be owed £100,000 in pensions

The Department for Work and Pensions (DWP) has sent letters to thousands of people informing them they could be owed more than £100,000 in underpaid state pensions. However, many of these letters have gone unanswered, leaving potential claimants sitting on a “pension goldmine.” A Freedom of Information (FOI) request revealed that as of July 31, 2024, 1,859 people had received letters from the DWP about potential underpayments to deceased relatives but had not responded. The majority of these cases involve widows or widowers who the DWP believes may have been underpaid. The underpayments stem from a historic DWP error that affected three groups, mainly women, who had their state pensions underpaid. These groups include married women and widows who reached state pension age before April 2016 and those aged 80 and over, regardless of marital status. Former pensions minister and LCP partner Steve Webb urged recipients of these letters to respond promptly.

Pension underpayment notifications unaddressed

“Although not all underpayments are large, in some cases, people have received £100,000 or more, so the recipients of these letters could be sitting on a pensions goldmine,” said Webb. The DWP has confirmed that they only calculate the underpayment entitlement once they receive a reply to the letter. If the DWP cannot trace a next of kin, any underpaid amount will be retained by the government. The FOI data shows that 1,671 letters were sent to next of kin flagging potential underpayments, with an additional 131 cases relating to married women whose pensions were not automatically increased when their husbands retired and 57 cases relating to underpaid pensions to the over 80s. Webb emphasized that these letters often “arrive out of the blue,” and many may not realize the importance of responding. He urged people to check if they have received such a letter and to respond as soon as possible if they have delayed doing so. This historic oversight has left potentially life-changing sums of money unclaimed, making timely action imperative for those who may be affected.