DWP needs to ‘come clean’ over new pension error revelations – Steve Webb, LCP

Media centre

The Department for Work and Pensions needs to ‘come clean’ over the scale and nature of a new round of state pension errors, according to LCP partner Steve Webb, following revelations of new errors going back decades.

According to reports on the BBC News website, DWP discovered in the 1990s that because of IT problems it was making errors in the uprating of the Graduated Retirement Benefit (GRB).  GRB is an addition to the basic state pension for those who worked between 1961 and 1975 and was a forerunner of SERPS, the state earnings-related pension scheme.  Reports suggest that the errors are typically small, and are a mix of under-payments and over-payments, but that large numbers of people may be affected.  It is reported that DWP took a decision in 2002 that it was not worth fixing this problem.  It seems likely that errors persist to this day.

This latest IT problem comes on top of DWP admitting that it had underpaid over 130,000 people, overwhelmingly women, over a period of decades, with a total amount underpaid in excess of £1 billion.  Over 500 civil servants are to be employed to put this error right, and the correction of those errors is expected to take until the end of 2023.

Commenting, LCP partner and former pensions minister Steve Webb said: “It is astonishing that DWP could decide that it is simply not worth fixing systematic errors on state pension payments going back decades.  Although the errors are typically small, this could have knock on effects, perhaps wrongly depriving some people of much larger amounts in means-tested benefits such as pension credit.  This story raises serious questions about transparency and accountability within the DWP.  It also prompts questions about how many other errors are simply ‘swept under the carpet’ and never admitted.  DWP now needs to come clean over the scale of this problem as well as any other errors which have never been disclosed.  Parliament will expect a written statement from the Minister at the earliest opportunity with a full explanation”.

** ENDS **

On point hub

On point hub

Shining a light on issues behind the headlines

LCP's on point hub is the place to access all our topical papers which provide fresh and thought-provoking analysis on a wide range of pensions and personal finance topics

Explore the hub