"In thousands of cases, the person who was underpaid is sadly no longer with us, but their heirs should still benefit from any underpayment."
- Steve Webb, partner at LCP and former pensions minister
A new FOI request has revealed that over 1,800 people could be sitting on a ‘pensions goldmine’ which will go unclaimed unless they reply to DWP letters, according to former pensions minister Steve Webb.
A FOI reply received by Steve Webb, now partner at LCP, has revealed that at the end of July 2024, 1,859 people had received letters from DWP telling them about potential underpayments of state pension to their late parents or late spouse, but had not responded. Unless DWP receives a reply to these letters, the underpayment will remain unclaimed.
The vast majority of these cases relate to case where the person who died was a widow (or widower) and DWP now believes they may have been underpaid state pension. There are 1,671 letters to next of kin flagging potential underpayments of this sort to which DWP has yet to receive a reply. A further 131 relate to cases where a married woman’s low pension was not automatically increased when her husband retired, and 57 cases relate to underpaid pensions to the over 80s.
DWP say that they only work out the amount potentially owed when they receive a reply to the letter, but in the past underpayments have ranged from a few pounds to over £100,000.
These letters arrive ‘out of the blue’ and people may not realise the importance of responding. If DWP cannot trace a next of kin then any underpaid monies will be retained by the Government.
Steve Webb commented: “We know that well over 100,000 people were underpaid state pensions and DWP has spent more than three years trying to track them down. In thousands of cases, the person who was underpaid is sadly no longer with us, but their heirs should still benefit from any underpayment. Although not all underpayments are large, in some cases people have received £100,000 or more, so the recipients of these letters could be sitting on a pensions goldmine. If you have received a letter from DWP about a potential underpayment to a loved one, I would urge you to respond as soon as possible.”
