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£800 Million Payout: 5 Key Categories To Get A State Pension Boost Of Up To £9,000

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The UK's Department for Work and Pensions (DWP) is currently engaged in one of the largest administrative correction exercises in its history, a process that is delivering a significant financial boost—in the form of massive arrears payments—to hundreds of thousands of pensioners. As of the most recent figures up to March 2025, the DWP has already repaid over £800 million to individuals who were historically underpaid their State Pension, with the total bill expected to exceed £1 billion. This monumental effort is a direct response to a scandal rooted in complex pension rules and outdated IT systems, primarily affecting women who retired under the old State Pension system.

The scale of the error is staggering, with estimates suggesting that as many as 200,000 or more individuals may be owed money, with average payouts for some groups reaching close to £9,000. This article breaks down the five critical categories of people involved in this correction, explains the mechanisms behind the underpayments, and details the latest progress of the DWP's Legal Entitlements Administrative Practice (LEAP) exercise, providing the most up-to-date information for December 2025.

The State Pension Underpayment Scandal: A Breakdown of the Massive Arrears

The underpayment crisis stems from systemic administrative errors and the failure of DWP systems to automatically increase the State Pension for certain groups of people, particularly married women, widows, and the elderly, who were entitled to higher rates based on their spouse's National Insurance contributions. The DWP formally began its correction exercise on January 11, 2021, to systematically review millions of records.

The total number of underpayments identified by the DWP has surpassed 130,000, but the total number of people who could benefit from a "boost" in their weekly payments and a lump-sum arrears payment is much higher. The National Audit Office (NAO) has scrutinised the exercise, highlighting the complexity and the slow pace of the correction, which was initially projected to be completed earlier but is now expected to run well into 2025 and beyond due to the sheer volume and complexity of cases.

The 5 Key Groups Eligible for the State Pension Boost

The DWP's correction exercise focuses on five distinct categories of pensioners who may have been underpaid. If you or a family member fall into any of these groups, you could be due a significant arrears payment and an uplift to your ongoing weekly pension.

1. Married Women (Category BL)

  • The Issue: Married women who reached State Pension Age before April 6, 2016, and whose husbands retired after March 16, 2008, should have had their State Pension automatically uplifted to 60% of their husband's basic State Pension. The system failed to apply this uplift automatically.
  • The Correction: These cases, known as 'Category BL,' were the first focus of the LEAP exercise. The DWP has successfully completed the review of this initial tranche of cases.
  • Average Payout: The average arrears payment for this group is substantial, reflecting years of underpayment.

2. Widows and Widowers (Inherited Pension)

  • The Issue: Women (and in some cases, men) who were widowed may have been entitled to inherit a portion of their deceased spouse’s State Pension entitlement, often resulting in a significant increase. Errors in recording or applying this inheritance led to underpayments.
  • The Correction: The DWP is actively reviewing the records of widows and widowers to ensure the correct inherited State Pension amount was applied following the spouse's death.
  • Urgency: This category includes cases where the pensioner has since passed away, with the DWP actively tracing estates to ensure the owed arrears are paid to the beneficiaries.

3. Over 80s (Non-Contributory Pension)

  • The Issue: Individuals who are over the age of 80 may be entitled to a non-contributory State Pension, even if they never paid National Insurance contributions. This is a basic entitlement that was not always applied correctly.
  • The Correction: The DWP is checking records to ensure all pensioners over 80 are receiving the correct non-contributory rate.

4. Married Women (Pre-2008 Husband's Retirement)

  • The Issue: Similar to Category BL, this group involves married women whose husbands retired *before* March 17, 2008. These women were required to make a separate claim to receive the uplift, which many did not know they needed to do.
  • The Correction: While the DWP is prioritising the automatic uplifts, this group still needs to be reviewed. Crucially, women in this category may need to proactively contact the DWP to claim their arrears.

5. Home Responsibilities Protection (HRP) Errors

  • The Issue: A separate but related error involves the incorrect recording of Home Responsibilities Protection (HRP), a scheme that protected the State Pension entitlement of parents and carers who stayed at home. Errors in transferring HRP data from HMRC to the DWP's National Insurance records have led to underpayments.
  • The Correction: A dedicated correction exercise for HRP errors is now underway, with HMRC and the DWP working together. As of March 2025, this exercise has already identified over 12,000 underpayments, paying out around £104 million in arrears.
  • Key Detail: This affects people who claimed Child Benefit before 2010.

The Frozen Pension Campaign: The Other 400,000 People

While the DWP correction exercise is a confirmed boost for over 130,000 people, the keyword "state pension boost for 400,000 people" also strongly relates to another ongoing campaign: the "Frozen State Pension" issue. This is a separate, but equally critical, matter of pension inequality.

Over 400,000 British retirees who live overseas in certain countries (including Canada, Australia, and New Zealand) have their State Pensions "frozen" at the rate they were on when they first left the UK or when they began claiming it. Unlike pensioners in the UK and in other countries (like the US and EU nations), their pensions do not benefit from the annual Triple Lock increase (which guarantees an uplift based on the highest of inflation, average earnings growth, or 2.5%).

Campaigners are putting fresh pressure on the UK Government to unfreeze these pensions, arguing that it is an unfair penalty for those who have paid their National Insurance contributions. Although this is currently a *demand* for a boost, rather than a confirmed payment, its prominence in the news cycle is significant, making it a major entity in the wider State Pension debate.

What to Do If You Believe You Are Owed Arrears

The DWP has stated that the majority of the correction work, especially for Category BL married women, will be handled automatically through the LEAP exercise. However, proactive steps are recommended, especially for the groups that require a claim or for those who are concerned their case may be missed.

Steps to Take:

  1. Check Your Category: Determine if you or your late spouse fall into one of the five categories, especially if you are a married woman whose husband retired before 2008.
  2. Contact the DWP: You can contact the DWP's dedicated State Pension correction teams. It is often recommended to call the State Pension helpline and specifically ask for a review of your entitlement based on the historical underpayment scandal.
  3. Use Online Resources: Pension specialists like LCP (Lane Clark & Peacock) have published extensive guides and calculators to help people estimate if they have been underpaid.
  4. Be Patient: The DWP has committed vast resources to this, but the process of reviewing millions of records is complex and time-consuming. The correction exercise is a long-term project with a significant backlog.

The ongoing correction exercise is a moment of necessary financial justice for hundreds of thousands of pensioners. With over £800 million already paid out as of the latest 2025 figures, the DWP is slowly rectifying decades of administrative failure, providing a crucial and often life-changing boost to the incomes of the UK's elderly population.

£800 Million Payout: 5 Key Categories to Get a State Pension Boost of Up to £9,000
state pension boost for 400000 people
state pension boost for 400000 people

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