Pension underpayment "scandal" in the UK

The subject of "pensions" has never been a straightforward one.

In addition, it has never been cheap to provide a pension.  In addition, none of us was born with the ability to claim the appropriate amount of pension or to check that the amount paid is the correct amount.  That sort of information has to be given to us or (better) the work done for us.  Earlier this year, the Department for Work and Pensions (DWP) stated that some 200,000 women (mainly married women and widows) had likely been underpaid their state pensions and that it was writing to them to inform them that their benefits would be uplifted.  Sir Steve Webb (formerly a pensions minister in the Conservative / Lib-Dem coalition government but currently a consultant at Lane Clark & Peacock) stated earlier this week that a further 50,000 women have, in fact, had their benefits underpaid because they were unaware that to be given an uplift, they had to claim for it. Underpayments apply to entitlements dating back to 2008. Particularly given the current virus-induced crisis that, at least initially, seemed to target the elderly, it seems likely that at least some of the affected individuals have since passed away - meaning that they are hardly in a position to take advantage of the back-dated payments the DWP states it will now make.  Sir Steve Webb estimates that the cost of  making the appropriate top-up payments is £650m and stresses that the cause of the problem was miscommunication by the DWP.  Sir Steve has further indicated that the failure to communicate appropriately and the consequent underpayment of pension represents an instance of maladministration - one he will urge the Pensions Ombudsman (the ombudsman is able to deal with cases of maladministration) to investigate.  Sir Steve has a point about maladministration but any investigation is likely to come too late for many retired women.

Disclaimer

This information is for general information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Please contact us for specific advice on your circumstances. © Shoosmiths LLP 2024.

 


Insights

Read the latest articles and commentary from Shoosmiths or you can explore our full insights library.