8 UK State Pension Errors to Cost Government Millions

Published / Last Updated on 07/04/2022

According to a Freedom of Information request by LCP Partners to the Department for Work and Pensions (DWP), there has been a total of 8 system errors in State Pension calculations and payments since 2007 affecting thousands of people.

In its statement, https://www.lcp.uk.com/media-centre/2022/04/dwp-reveal-new-catalogue-of-blunders-on-state-pensions-in-new-foi-response/, LCP reports:

Error Number

Name of Exercise

Summary of issue

Already Known?


State Pension Credits – Home Responsibility Protection

Parents were due ‘home responsibilities protection’ for time at home with children but this was never mapped onto their state pension record;  the correction exercise ran from 2009-2011, benefited around 36,000 people and resulted in £83m in arrears being paid.



State Pension Underpayments – mainly widows’ state pension uplifts after spouse died

Current being fixed during 2021-23, to identify 134,000 pensioners who have been underpaid state pensions and are owed around £1 billion in back payments.



State Second Pension (S2P) Underpayments

Identified by a DWP staff member, an error in the way the HMRC IT system calculated S2P amounts for some individuals. This resulted in small underpayments of S2P.

Newly revealed by DWP


Incorrect Maximum Additional State Pension Value (2010/11)

During the 2010/11 uprating exercise an incorrect rate of maximum Additional State Pension was input into the system. The correct amount was £158.83, but £157.74 was used instead.

Newly revealed by DWP


New State Pension – Revaluation/Uprating of Inherited “old rule” amounts

This issue affects awards of inherited State Pension where the survivor is receiving their State Pension under the “old rules” (i.e. they reached State Pension age before 6 April 2016) and their deceased partner was or would have received their State Pension under the “new rules” (i.e. they reached or would reach their State Pension age on or after 6 April 2016).  The IT system had incorrectly applied new State Pension revaluation/uprating rules instead of the pre 2016 rules to the inherited amounts.

Newly revealed by DWP


Reduced Rate Election (RRE) – Transitional Amounts

It was identified late in 2019 that some married women were not receiving the RRE transitional amount they should be getting in accordance with the law.

Newly revealed by DWP


Underpayments of Deferral Amounts

The PSCS system had a field limit of £99.99 for deferral increments. This resulted in a very small number of State Pension customer only being paid the excess over the £99.99 limit and not the full increment value.

Newly revealed by DWP


Equal Treatment Exercise for Transgender Women

Transgender women born between 31 October 1953 and 6 November1953 who had lived in their acquired gender for at least two years by October 2018 and have had gender reassignment surgery may be entitled to up to 6 days of backdated State Pension, because of a CJEU ruling. Prior to the exercise start date, Transgender women could only get their State Pension at the earlier female State Pension age if they had a Gender Recognition Certificate. State Pension ages equalised on the 6 November 2018.

Newly revealed by DWP

Commenting, Steve Webb, partner at LCP, said: “Whilst anyone can make a mistake, what is worrying about this catalogue of errors is how long it can take for anyone to spot that anything is wrong.  In one case it was three years after the new state pension was implemented before anyone spotted a systematic problem with the payments to certain married women.  It is also surprising that information about these errors and correction exercises has not previously been made public.  DWP need to improve on two fronts – better error checking to make sure people are not paid the wrong pension in the first place, and greater transparency so that the public is told when things have gone wrong”.


Well done LCP.  As ever, the question is who 'regulates to regulators'.  Accountability is key and with FOI requests like this, things can only get better.  Perhaps a system of tax and national insurance that is not so ‘steeped’ with smoke and mirrors to disguise how much we really pay for services would make it easier?  Never forget the ‘KISS’ principle in commerce:  Keep It Simple Stupid!

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