Millions Risk Losing Unpaid State Pensions, Warns Former Minister

The Department for Work and Pensions (DWP) faces warnings that millions of pounds in unpaid State Pensions may be lost due to underpayment errors. According to former pensions minister Sir Steve Webb, who is now a partner at Lane Clark & Peacock, families could be denied justice if the government erases critical information from its database.

Sir Steve has raised concerns about the DWP’s policy of deleting old State Pension records, which could obstruct families from claiming money owed due to administrative errors. He stated that lifting the current embargo on deletions would render it “virtually impossible” to rectify longstanding issues.

The DWP typically deletes pension files four years after an individual passes away. However, this practice was halted in 2021 after significant underpayment errors were identified, primarily affecting married women, widows, and individuals over the age of 80.

Potential Loss of Records

Sir Steve highlighted that if the deletion embargo is lifted, up to two million records of deaths occurring between 2017 and 2020 could be eliminated. This scenario would complicate efforts for families to determine whether their loved ones were underpaid, even in cases where outstanding amounts are owed to their estates.

Current government data indicates that 194,000 individuals were affected by missing home responsibilities protection, a scheme designed to secure State Pension rights for parents and carers. Alarmingly, 43,000 of these individuals passed away without receiving what they were owed, translating to an estimated loss of £127 million in payments.

The DWP acknowledged the gravity of the situation, stating that it has paused deletions while ongoing corrective measures are implemented. To date, the department has disbursed £900 million in arrears to over 900,000 pensioners. Nevertheless, the DWP has not announced when or if deletions will resume.

Options for Families

Families seeking to determine eligibility for home responsibilities protection can visit the government website. Additionally, they can utilize Sir Steve Webb’s underpayment checker available on the Lane Clark & Peacock website. The government portal also allows individuals to request information regarding State Pension underpayments for deceased persons.

For those who have lost a loved one, keeping copies of National Insurance and care records can be vital for verifying entitlements, even in the event of data deletion. Executors or heirs can request a posthumous review to ensure that all potential claims are addressed.

As discussions continue regarding the future of State Pension record management, families are urged to stay informed and proactive in safeguarding their rights to any owed payments.