Have you received a letter from the DWP about an insufficient state pension? It’s vital to respond, says Steve Webb

Around 1,800 people could lose their state pension payments because they have yet to respond to government letters about money owed to their deceased parents or spouses.

The sums owed could range from a few pounds to more than £100,000, but unless beneficiaries come forward, they will never know and the Government will pocket the money.

“In thousands of cases, the person who was underpaid is sadly no longer with us, but their heirs should still benefit,” says This is Money retirement columnist Steve Webb.

The number of people who have yet to respond to the letters was discovered through a Freedom of Information request.

Many older married and widowed women, and both men and women over the age of 80, were underpaid totalling more than £1bn in a state pension scandal uncovered by Webb and This is Money.

The Department for Work and Pensions is therefore attempting to contact those affected and pay the arrears to them (or their beneficiaries, if they have already died).

In another HMRC mistake we highlighted, many mothers lost large sums of money in state pensions due to gaps in their National Insurance records, and the taxman is responsible for contacting those people.

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

The DWP’s letter-writing campaign has sparked frustration over delays and other errors, with families who respond to letters left in limbo for months over what they are owed.

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

The amount of the underpayment in question is not disclosed in the initial letter, because it is not calculated until the DWP receives a response.

This leaves the recipients of the letters baffled as to the sums they might receive.

However, provided they respond, their arrears should eventually be paid, rather than being retained by the Government.

Webb, a former pensions minister who is now a partner at consultancy LCP, says his freedom of information request found the DWP had sent letters to 1,859 people about possible state pension underpayments but they had not yet received a response by the end of July.

The vast majority relate to cases where the deceased was a widow or widower, and some 1,671 relatives have not yet responded, he says.

Another 131 cases concern pensions of married women that were not automatically increased when their husbands retired, and 57 concern underpayments to people over 80.

The letters will arrive “out of the blue” to people who may not realize the importance of responding, Webb said.

He says that if someone is worried that they are scammers and therefore reluctant to send personal details, they can check that the address matches the one DWP contact details are on the gov.uk site here.

That link also has a phone number you can call if you are concerned and want to know if the letter is genuine.

Webb is urging people to check whether they have received a letter and to act if they put off responding, because otherwise they could be sitting on a “gold mine” that will go unclaimed.

“We know that more than 100,000 people received less than their fair share of state pensions and the DWP has spent more than three years trying to track them down,” he said.

‘Although not all underpayments are large, in some cases people have received £100,000 or more, so recipients of these letters could be sitting on a pension goldmine.

‘If you have received a letter from the DWP about a possible underpayment to a loved one, I urge you to respond as soon as possible.’