The UK’s state pension payment system is not fit for purpose, resulting in the “shameful shambles” of an underpayment scandal that left tens of thousands of pensioners short-changed, according to a scathing report from a committee of MPs, the public accounts committee (PAC).
Last year it emerged that the DWP was estimating it had underpaid 134,000 pensioners, mostly women, a total of more than £1bn of state pension cash that they were entitled to.
The National Audit Office said this long-term underpayment of state pensioners – some problems date as far back as 1985 – was the result of repeated errors that were almost inevitable amid complex rules and outdated IT systems.
It emerged that those affected that the DWP could trace would be paid an average of £8,900 each.
The report stated that the pension payment system “is not fit for purpose”, and set out a series of recommendations.
The committee said the department was now on its ninth go at fixing the mistakes since 2018, and that this “comes at great cost to the taxpayer” – the bill for staff costs alone is expected to top £24m by the end of 2023.
The MPs also said the DWP had “left people in the dark over their entitlement”, adding: “The department also admits that many other pensioners are under-claiming their state pension … these pensioners need clearer information to act or risk missing out on significant sums.”