Unattended state pension underpayment letters pile up, sparking speculation over potential untapped 'pension riches' for some individuals.

The Department for Work and Pensions (DWP) has been writing to thousands of individuals who may have been underpaid their state pensions, with over £570 million in underpayments identified so far. As of the end of July 2024, 1,859 people who received letters about potential underpayments to their late parents or late spouse have not responded.

Steve Webb, a former pensions minister, warns that these letters arrive "out of the blue" and people may not realize the importance of responding. He emphasizes that not everyone will receive automatic payments for state pension underpayments, and individuals may need to take action to claim the money owed.

The errors in question are related to inaccuracies in National Insurance records. These errors affect a wide range of individuals, including married women who didn't get an automatic increase when their husband retired under old rules, widowed pensioners from before 2016, and recipients of child benefit before 2000.

In some cases, the underpayments have amounted to over £100,000. The DWP is investigating over 200,000 cases of state pension errors, and the Pension Service and LCP's state pension underpayment tool can help individuals determine if they have been underpaid.

Webb states that over 100,000 people have been underpaid state pensions, and DWP has spent over three years trying to locate them. However, unless these individuals respond to the DWP letters, the underpayments will remain unclaimed and go into the government's coffers.

There are 131 cases where married women's pensions were not automatically increased when their husbands retired, and these cases have yet to receive a response. Furthermore, more than £570 million worth of state pension underpayments remain unanswered, including over 1,671 letters from DWP regarding potential underpayments to widows who have since passed away.

Recipients of letters from DWP about potential underpayments to loved ones are urged to respond as soon as possible. If individuals claimed child benefit before 2000, they could potentially be owed thousands of pounds. However, there is no publicly available information linking specific individuals to unpaid and presumably unknown government pension overpayments.

Most of the errors are from before the new state pension launched in April 2016. The DWP has been working hard to rectify these issues, but it is crucial for affected individuals to respond to the letters they receive to ensure they receive the state pension they are rightfully owed.

Unattended state pension underpayment letters pile up, sparking speculation over potential untapped 'pension riches' for some individuals.