Recommendation 6

The Department’s efforts to correct the systemic underpayment of State Pension are too slow to meaningfully put things right. The Department now estimates that 237,000 pensioners have been underpaid a total of £1.46 billion in their State Pension. Despite these underpayments going back as far as 1985, the Department’s overall exercise to correct this issue is delayed from the end of 2023 to the end of 2024. The Department cannot be certain that its plan to deliver the exercise on schedule is achievable, as it is dependent on assumptions around recruitment, retraining, and automation. We are not convinced that the Department has done enough to ensure its communications to potentially affected pensioners are sufficiently clear. We are concerned that this may leave many pensioners lacking reassurance that they will receive meaningful and timely redress. The Department does not yet know the full extent of the underpayment relating to Home Responsibilities Protection, and it is dependent on HMRC to evaluate the impact of these underpayments on pensioners. The Department cannot be certain that it has identified all the underpayments implied by the results of its annual measurement exercise. Overall, we remain unconvinced that the Department’s control systems are adequate to detect further underpayments before they build up into major issues in future. Recommendations: As part of its Treasury Minute response, the Department should set out a credible plan to deliver the exercise to correct State Pension underpayments on schedule and explain how it will update its communications to reassure pensioners that they will be meaningfully compensated. In addition to this, the Department should: 8 The Department for Work and Pensions’ Accounts 2021–22 – Fraud and error in the benefits system • as part of its Treasury Minute response, work with HMRC to fully evaluate the extent of the HRP underpayment as soon as possible and provide a timetable of when it expects each phase of this p