The Department for Work and Pensions has so far paid out a total of £209.3m for 31,817 cases of people, mainly women, being underpaid the State Pension.
Despite the progress, Steve Webb of pensions consultancy LCP, has warned that the DWP is “way behind schedule” in fixing this and other state pension errors.
The latest DWP figures show £209m in compensation was paid between 11 January 2021, when the LEAP scheme was set up, and 31 October.
In 2020, the Department for Work and Pensions’ was alerted to the fact that a number of individuals had not had their State Pension increased automatically when this should have happened. As a result the Legal Entitlements and Administrative Practice (LEAP) scheme was set up by the DWP to check and correct individual cases.
The compensation scheme was established after industry experts, including Steve Webb, spotted that a number of pensioners, particularly women, may have been underpaid by small amounts for many years.
The DWP has so far reviewed nearly 63,000 cases of married pensioners with underpayments identified in just over 13,000 cases and average arrears payments made of £6,929.
In the case of widowed people just over 25,000 cases have been reviewed with underpayment identified in 7,876 cases. Average arrears of £10,772 have been paid out.
For the over-80s, nearly 24,000 cases have been reviewed so far with 10,783 underpayments identified and average arrears payments of £3,172.
The review is ongoing.
Steve Webb says the DWP is lagging in fixing the LEAP cases and other state pension errors. He said as a result, many older people will continue to be paid at the wrong rate, possibly for years to come.
He said the DWP now estimates that it has underpaid 237,000 pensioners overall a total of £1.46 billion due to the errors. He added that the discovery that the number of underpayments is around 100,000 higher than previously thought is a further setback.
An exercise to find pensioners affected has taken a long time to recruit and train staff.
He said the £209m paid to nearly 32,000 people is still just 13% of the estimated total number of people affected and 14% of the estimated money due. Over a billion pounds is still outstanding, he estimated, and it may take until 2024 or beyond to sort through the backlog.
Steve Webb said: “The scale of these underpayments is so great that putting it right could easily end up taking four years or more from start to finish. It is quite shocking that well over a hundred thousand pensioners are to this day receiving the wrong rate of pension, and the DWP is clearly way behind schedule in fixing the problem.
“With cost of living pressures affecting many elderly people on low incomes, it is essential that the pace of fixing these errors is stepped up and people get the money they are due as soon as possible.”
