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£736 Million Paid Out: 5 Ways The State Pension Boost Is Reaching 400,000 People Right Now

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The Department for Work and Pensions (DWP) is currently engaged in one of the largest financial correction exercises in UK history, delivering a significant State Pension boost and substantial back payments to hundreds of thousands of pensioners. As of the latest official figures in late 2024, the DWP has identified nearly 400,000 cases "at risk" of having been underpaid their State Pension over the last few decades, with the total amount repaid already soaring past £736 million.

This massive undertaking, known as the Legal Entitlements and Administrative Practices (LEAP) exercise, is not a standard annual uprating but a vital correction of historical administrative errors. For the pensioners affected—predominantly married women, widows, and those who claimed benefits for caring—this correction translates into a life-changing lump sum of arrears and a higher, correct ongoing weekly payment. The DWP expects the main correction exercise to be completed by the end of 2024, making this a critical and time-sensitive issue for anyone who believes they may be owed money.

The State Pension Underpayment Crisis: Who Are the 400,000 People Affected?

The figure of 400,000 people refers to the total number of cases the DWP initially identified for review across several distinct categories where administrative errors led to systemic underpayments. The underpayments largely stem from failures to correctly increase a person’s State Pension when their entitlement changed, such as upon a spouse’s retirement or death, or due to missing National Insurance credits for caring responsibilities. The vast majority of those affected are women who reached State Pension Age before April 6, 2016, under the 'old' State Pension system.

The DWP’s correction exercise is focused on three main priority groups, with a fourth, massive group being tackled separately in a joint effort with HMRC.

1. Married Women (Category BL)

  • The Error: Married women who retired under the old system were entitled to an increase in their basic State Pension to 60% of their husband's rate once he claimed his pension. The DWP failed to automatically uprate the payments for many women whose husbands reached State Pension Age before March 2008.
  • The Boost: These pensioners are receiving a lump sum of arrears, sometimes covering decades of underpayment, and a permanent increase to their weekly pension.

2. Widows and Widowers (Category B)

  • The Error: People whose spouse died were entitled to inherit a portion of their late spouse's State Pension entitlement. Errors occurred in recording or applying this inherited entitlement, leading to underpayments.
  • The Boost: Widows and widowers are receiving back payments and an uprated pension based on their correct inherited entitlement.

3. Over 80s (Category D)

  • The Error: People aged 80 and over who do not have a full National Insurance record are still entitled to a non-contributory State Pension (Category D). Errors were found in the application of this entitlement, meaning some of the UK’s oldest citizens were missing out.
  • The Boost: This group is receiving the non-contributory pension amount and any arrears they are owed.

4. Home Responsibilities Protection (HRP) Errors

  • The Error: Home Responsibilities Protection (HRP) was a scheme running between 1978 and 2010 that helped protect State Pension entitlement for parents and carers. A subsequent data matching exercise between DWP and HMRC revealed that many HRP credits were not correctly recorded on individuals' National Insurance records.
  • The Boost: This is a separate, massive correction exercise (also part of LEAP) affecting over 200,000 women. The average payout for HRP-related underpayments is currently estimated to be just under £9,000, but some individual cases have seen lump sum repayments of over £33,000.

5. Divorced Women and Other Complex Cases

  • The Error: While not a core focus of the initial DWP exercise, pension experts have highlighted that divorced women who could have benefited from substituting their former spouse’s National Insurance record for their own may also be underpaid.
  • The Boost: Although these cases are not automatically being reviewed, individuals who suspect they are underpaid based on a divorce settlement are strongly encouraged to contact the DWP to request a manual review.

Progress Update: The Latest Figures on Arrears Paid and Cases Reviewed

The DWP has been providing regular updates on the LEAP correction exercise, with the latest figures confirming the scale and momentum of the program. As of the most recent reporting period in late 2024, the total amount of arrears paid out has reached a staggering £736 million, benefiting over 119,050 pensioners.

The exercise is highly complex due to the age of the records, the reliance on paper documentation, and the need to cross-reference data between the DWP and Her Majesty’s Revenue and Customs (HMRC), especially for the HRP cases. The DWP has committed to completing the review of the main categories (Married Women, Widows, and Over 80s) by the end of 2024, though the HRP correction, which requires a separate data matching process, is expected to continue into 2025.

The sheer volume of work has raised concerns about the pace of the correction. However, the DWP has increased staffing and resources to meet the ambitious deadline, recognizing the financial hardship the underpayments have caused. The average payment amount varies significantly by category, but the size of the lump sums—often covering many years of missed payments—is providing a substantial financial boost to those affected.

How to Check Your Eligibility and Claim Your Pension Arrears

If you believe you may be one of the 400,000 people affected by these underpayments, it is crucial to check your eligibility, especially if you fall into one of the main categories. The DWP is proactively reviewing cases, but the process can be slow, and for some categories, such as divorced women, a claim must be initiated by the individual.

Key Steps to Take:

  1. Check Your Category: Determine if you fall into one of the priority groups:
    • Are you a married woman whose husband claimed his State Pension before March 2008?
    • Are you a widow or widower whose State Pension did not increase after your spouse’s death?
    • Are you a parent or carer who claimed Child Benefit between 1978 and 2010 and may be missing Home Responsibilities Protection (HRP) on your National Insurance record?
  2. Contact the DWP: The most direct route is to contact the DWP’s dedicated telephone line for State Pension enquiries. You will need to explain that you are requesting a review of your State Pension entitlement, specifically mentioning the underpayment correction exercise.
  3. Use the New HRP Tool: For those concerned about missing HRP, HMRC has launched an online tool to help people check if they have any missing National Insurance credits from the period 1978 to 2010. Correcting these credits is essential for receiving the full State Pension boost.
  4. Seek Expert Advice: Pension specialists and independent financial advisors (IFAs) have been instrumental in highlighting these errors. Consulting a pensions expert can provide clarity on complex cases, such as those involving the Married Women's Stamp or multiple periods of caring.

The State Pension underpayment scandal has shone a light on the complexities of the UK's social security system. While the DWP's correction exercise is a positive step, its sheer scale—affecting nearly 400,000 people and totaling over £736 million in arrears—underscores the importance of every pensioner reviewing their entitlement to ensure they receive the full boost they are legally owed.

state pension boost for 400000 people
state pension boost for 400000 people

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