Four out of every 100 claims were underpaid in the last year, official data reveals.
Retirees missed out on huge sums of State Pension funds in the last year due to Government errors, new figures have revealed.
A total of £470 million was underpaid during the 2023/24 financial year ending in April, which represents an underpayment rate of 0.4%.
At the other end of the scale, a total of £170 million was overpaid to claimants.
Why are claimants underpaid?
According to the DWP, the main reason for underpayments was a result of incorrect recording of claimants’ National Insurance Contributions.
"The main error within this category continued to be around the historic recording of Home Responsibilities Protection (HRP), administered by HMRC," it explained.
"HRP was a scheme existing from 1978 to 2010 to protect the State Pension entitlement of people with domestic caring responsibilities.
"HRP reduced the number of qualifying years needed to get a full Basic State Pension.
"Some people have not had all eligible years of HRP recorded on their National Insurance records, and so have an incomplete record affecting their State Pension entitlement."
The second most common reason for underpayments was errors relating to the DWP failing to act on reported changes to marital status or at age-related trigger points.
"The main type of underpayments found within this category for FYE 2024 were on those who have been widowed and their SP was not uplifted to include amounts they are entitled to inherit from their late husband, wife, or civil partner," it explained.
'It pays to check'
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said the errors highlighted the importance of checking whether you're receiving the correct amount.
“We tend to assume benefits such as state pension will be paid out automatically at the correct rate, but we’re wrong," said Morrissey.
"State Pension overpayments stood at £170 million in 2023/2024.
"However, these were a drop in the ocean compared to the estimated £470 million in underpayments over the same period.
"That’s a lot of people who aren’t receiving the money they are entitled to and for many it’s caused them to struggle financially – it pays to check!”