State pension underpayments in the UK totalled £470m in 2023/24, whilst state pension overpayments rose to £170m in 2023/24, new data from the government has revealed.

The latest fraud and error statistics revealed that the state pension overpayment rate remained at 0.1 per cent in 2023/24, rising slightly from £100m in the 2023 financial year to £170m in the 2024.

In particular, overpayments due to official error remained at 0.0 per cent, falling slightly from £40m to £20m over the past year, while overpayments due to claimant error remained at 0.1 per cent, with £70m overpaid in relation to a claimant error.

There was an increase in overpayments due to fraud, as this rose from 0.0 per cent (£0m) in 2023, to 0.1 per cent (£80m) in FYE 2024.

However, Hargreaves Lansdown head of retirement analysis, Helen Morrissey, argued that the state pension overpayments "were a drop in the ocean" compared to the underpayments seen over the same period.

Indeed, the government data revealed that the state pension underpayment rate was 0.4 per cent in 2023/24, with £470m underpaid in the 2024 financial year, compared with 0.5 per cent (£580m) in FYE 2023.

Incorrect recording of claimants’ national insurance contributions was the main driver for underpayments, at 0.2 per cent.

The main error within this category continued to be around the historic recording of Home Responsibilities Protection (HRP), a scheme existing from 1978 to 2010 to protect the state pension entitlement of people with domestic caring responsibilities.

The issue impacts those who made a claim before May 2000, as those who made a claim without putting a NI number on their claim may not have had their credits, previously known as Home Responsibilities Protection (HRP), transferred to their NI account.

Errors relating to the department failing to act on reported changes to marital status or at age related trigger points was the second largest source of underpayments at 0.1 per cent, down from 0.3 per cent in 2023.

According to the update, the main type of underpayments found within this category for 2024 were on those who have been widowed and their state pension was not uplifted to include amounts they are entitled to inherit from their late husband, wife, or civil partner.

However, errors that occurred on the additional components of state pension that people might have received on top of their basic state pension fell to 0.0 per cent, down from 0.1 per cent in 2023.

Commenting on the findings, Morrissey stressed the need for savers to take action and check that the information held on their state pension record is correct, warning that "that’s a lot of people who aren’t receiving the money they are entitled too and for many it’s caused them to struggle financially – it pays to check!"

She stated: "The key reason behind errors in state pension payments is inaccuracies around national insurance records. There have been high profile cases of groups who have not received the uplifts they were entitled to under the basic state pension system when their partners died for instance.

"However, even if you aren’t in this position, it shows the importance of getting a state pension record and checking that the information held for you is correct. Taking the time to do this now could save yourself a nasty shock when it comes to retirement."

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