DWP leaves families heartbroken over mysterious state pension payments

Bereaved families are told their deceased relatives could be owed back state pension payments and are then left in limbo for months by the Department for Work and Pensions.

The amounts involved are not disclosed, leaving recipients of the letters baffled as to what sums they might receive.

Three cases we recently investigated resulted in separate payments of £3,800 and £27, and an apology for sending a letter in error.

But in recent years, huge mistakes have led to payouts of tens of thousands of pounds and, in some cases, compensation of more than £100,000.

This was because many older married and widowed women, and both men and women over 80, were underpaid, totalling more than £1bn, in a state pension scandal uncovered by our columnist Steve Webb and This is Money.

In another HMRC mistake we highlighted, many mothers lost out on large sums of state pension money due to gaps in their National Insurance records.

As a result, the DWP and HMRC are trying to contact those affected and pay the arrears to them (or their beneficiaries, if they have already died), but this has led to frustration at delays and other errors.

Earlier this year, Webb helped the family of a 90-year-old woman who sought an initial letter for months and at one point was verbally told by the DWP that she could be owed £60,000 or more, but her payment ended up being just over £400.

Webb says it is “just cruel” to send people letters about underpayments of state pensions that raise their hopes and then leave them in limbo for months.

It is urging the DWP to implement a streamlined process so that when relatives respond to such letters things progress quickly towards a final decision and payment.

Have you or a deceased relative received an insufficient state pension? Find out what to do next

One DWP staff member said: “Don’t book that world cruise yet” and laughed.

The grieving daughter, Clare Thomas (whose name has been changed), received a letter in January saying her mother, who died aged 87 in spring 2023, could be entitled to a state pension inherited from her late husband.

This referred to Ms Thomas’s father, who had previously died aged 85.

Ms Thomas was executor for her late mother, a retired cleaner who lived in Scotland, and says: ‘In April 2024 I contacted the DWP bereavement team and was told this could take up to a year to resolve.

‘We were also told that we couldn’t speak to anyone in the specific section of the DWP that dealt with underpayments because they “didn’t take calls”.’

During her call, the staff member she spoke to told her “don’t book that world cruise yet” and laughed, which she found astonishing and disrespectful.

“Someone on the bereavement team said that. I thought it was appalling. They were very dismissive,” she says.

When This is Money asked the DWP to investigate the case, it apologised as it emerged the state pension had been paid correctly to Ms Thomas’s mother and the letter had been sent in error.

A spokesman said: ‘We apologise to Ms (name redacted) for the inconvenience caused by sending a letter stating that her mother was not receiving the correct state pension.

‘This was due to an administrative error and we have written to (name redacted) to confirm that her late mother’s state pension was paid correctly.’

“It is impossible to contact the team that deals with this by phone or email”

John Williams is the executor of the estate of a close friend, Mary Evans, a retired postmistress who lived in Wales and died in Yorkshire aged 93 in 2020 (names have been changed).

He was not a beneficiary of her will, but was solely responsible for settling her estate.

Mr Williams received a letter from the DWP last October stating that Ms Evans had received an insufficient state pension between 2016 and 2020.

He responded immediately, but heard nothing more for the next eight months, despite making a dozen calls and sending a certified letter.

He says that although the amount of arrears involved was not disclosed, he was told it was substantial during a call to the DWP.

Williams was also told that Ms Evans’ estate was “high on the list of things to pay off” but she had to be patient as there were many women in a similar situation and the matter was being discussed in Parliament.

“I have been told on several occasions that it is impossible to contact the team dealing with this matter by phone or email,” Williams says.

‘I am concerned that I am currently 78 years old whilst the five residual beneficiaries who are currently unaware of this matter are all in the 75 to 95 age group and I am beginning to wonder whether this matter will be completed in our lifetimes.’

After Mr Williams contacted This is Money, we raised the matter with the DWP, who paid £3,800 in arrears and we apologise for the delay.

DWP left grieving daughter abandoned for months

Karen Roberts was contacted by the DWP in April regarding her late mother Anne, a former department store clothing quality inspector who lived in Scotland (names have been changed).

In a letter, he said his mother had received an insufficient state pension for about 12 years before her death aged 80 in 2019, but did not disclose the sum involved.

After hearing nothing more for months and being told over the phone that she couldn’t speak to the relevant department, she and her own daughter contacted This is Money.

Following our intervention, £27 of state pension arrears was paid, which was reduced because Anne had received Severe Disability Benefit.

Why did the DWP falsely say my 90-year-old mother was owed £60,000?

Former pensions minister Steve Webb has investigated two similar cases on behalf of readers who wrote in his This is Money column this year.

One person received a letter saying that their father, who had died aged 100, had received an insufficient state pension for 20 years, but then heard nothing from the DWP for six months.

Following Webb’s intervention, our reader inherited his father’s state pension arrears, amounting to just under £8,000. The DWP apologised for the delay.

In a second case, a 90-year-old widow received a letter last December saying she may be owed back payments.

When one of her daughters made numerous calls to claim payment over the next five months, DWP staff gave her widely differing estimates of the amount involved.

On one occasion she was told £24,000, on another £60,000 and perhaps more, and on another £400, causing confusion and distress to her elderly mother.

Webb eventually confirmed the sum owed was £438, and a DWP spokesman said: “We are very sorry for the errors in the handling of this case and for the service received by your reader.”

Webb, now a partner at pension consultancy LCP, said: ‘Where the DWP believes it has found money owed in state pension arrears, it has a duty to move quickly.

‘Sending letters to people who give them hope and then leaving them in limbo for months is just cruel.

‘And once again there seems to be no way to penetrate the bureaucracy to speak to someone who can actually tell you what’s going on.

“When people respond to these letters, there needs to be a streamlined process to reach a final decision and pay what they owe, not just put them at the end of a new queue.”