‘Should never have happened’ Outrage as thousands underpaid state pension due to DWP error
Pension: Expert discusses state pension tax
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According to the National Audit Office (NAO), the underpayment mistakes were due to “repeated human errors” over a period of a few years. These errors primarily impacted pensioners who first claimed the state pension before April 2016, do not have a full National Insurance record, and should have received certain increases in their basic payments. Both affected pensioners and members of the press helped bring this crisis to the attention of the DWP.
In January 2021 the Department confirmed it had started to review cases and will contact pensioners if it finds that they have been underpaid.
However, for Express.co.uk readers, this appears to be too little too late, with many sharing their outrage over the Government’s failure to pay pensioners what they deserve.
One reader, named Claremont77, highlighted how the basic state pension already compares unfavourably to other retirement pots in Europe.
They said: “Those who have worked and contributed to Britain all their working lives get one of the lowest pensions in the Western world and now it seems that many are diddled out of their true pension.
“Could any MP honestly live on £137 a week?”
Another reader, with the username Rodent, outlined the need for people to be constantly aware of how much they are contributing towards their state pension.
They explained: “The strange thing is anyone can check their National Insurance history by demanding a statement as I did some years back.
“In my case, it turned out an employer didn’t pay the correct amount of contributions and had to be chased up.
“The latest revelations don´t exactly display any sort of confidence in the system.”
Caribidus added: “Having worked for the DWP years ago, this is hardly a shock and horror.
“It is the usual badly trained staff who are on short term contracts and probably recruited by a company who are being paid vast amounts and who let the public down, or direct entrants.
“For those ordinary people who have been underpaid all those years, good for them. Nice windfall for Christmas although of course it should never have happened in the first place.”
Other readers, such as Theprophet, shared how their access to the full state pension has been hindered by changing rules and shifting red tape.
They added: “I paid National Insurance for 50 years but then only received a proportion of the state pension because apparently I was contracted out through a company pension scheme so received tax relief on company pension payments I made.
“However, today you only need 35 years of National Insurance contributions to get the full state pension.
“So despite my ‘tax relief’, I more than made up for that with my additional 15 years NI contributions.
“All pensioners are ripped off by these rogues.
According to Express readers, like Dunky, recent Governments have failed to take into account how pensioners are discriminated against when new changes come into place.
They said: “The state pension is a fiasco. It beggars belief that those receiving the old state pension are paid £41 per week less than those on the new pension.
“With 45 years of contributions, I feel I have been scammed, but there are others in the same boat who have 50 years of contributions.
“Civil service heads should roll for this latest mess.”
According to pension experts, while mistakes are often “inevitable”, the Government needs to act now in order to prevent similar state pension underpayment issues arising in the future.
Andrew Megson, the Executive Chairman of My Pension Expert, outlined the situation the DWP and wider Government has placed itself in.
Mr Megson said: “The Government has allowed a combination of complicated pension legislation, tax, government processes, underinvestment and legacy processes to fester for decades. And under these circumstances, major mistakes are inevitable.
“This has to be a wake up call for the Government, as well as the entire pension sector. Both parties have been complicit in allowing layer upon layer of regulation to isolate consumers from their pension, which we all know has led to a widening pension engagement gap.
“Recent research from My Pension Expert found that 46 percent of UK pension holders had not checked on their retirement finances within the previous 12 months.
“As such, pensioners are ill-equipped to understand the complex systems and, more importantly, where mistakes have been made, and we see major mistakes going unnoticed before it’s too late.
“I urge the Government to commit to an interrogative and transparent audit of the state of UK pensions, as well as the processes of the DWP.
“Doing so will enable it to understand how legislation and processes can be simplified — not to mention develop a plan to implement positive and sustainable change. Only then will they be able to restore confidence in the pension system.”
A DWP spokesperson said: “We are fully committed to ensuring the historical errors that have been made by successive Governments are corrected, and as this report acknowledges, we’re dedicating significant resource to doing so. Anyone impacted will be contacted by us to ensure they receive all that they are owed.
“Since we became aware of this issue, we have introduced new quality control processes and improved training to help ensure this does not happen again.”
Anyone concerned that they have not been paid the full state pension payment they are entitled to should contact their nearest Pension Office or DWP centre to report it.
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