The Department for Work and Pensions (DWP) has provided an update on the repayments it is making to pensioners affected by a historical error in their system. This mistake resulted in thousands of individuals receiving less state pension than they were entitled to.

In order to rectify this, the department is issuing backdated payments to those affected, with average payments ranging from £2,203 to £11,725 on average. The latest progress report revealed that £804.7 million has been disbursed as part of this scheme. This sum is distributed across 130,948 cases identified between January 2021 and March 2025.

All those impacted by the error should receive their repayment by March 2027, as confirmed last month by DWP permanent secretary Peter Schofield, according to Pension Age.

The DWP has reviewed 877,508 cases across three groups of affected people: married individuals, widowed pensioners, and people over 80 years old.

So far, affected married individuals have received an average of £5,553, totalling £252.8 million. Those over 80 have received an average payment of £2,203, amounting to £68.5 million, while widowed individuals have received an impressive average of £11,725, totalling £483.4 million paid out as of the end of March.

The department has completed the initial steps for all married individuals and those over 80 who were affected, ticking off the first and last category. However, as people have up to two years to submit information for their case, the number of underpayments identified and paid in these groups is anticipated to increase.

Reviews are still ongoing for widowed pensioners.

The issue was first spotted in 2020 when some individuals did not receive the required automatic increase in their state pension. A Legal Entitlements and Administrative Practice (LEAP) exercise was initiated to rectify individual cases and repay any arrears.

In certain instances, the underpayment of state pensions allowed individuals to claim other benefits such as Pension Credit, effectively balancing their payments to what they would have received had no error occurred.

The DWP is reportedly facing challenges with some cases where the recipient has passed away and an estate to which the arrears can be paid has not been identified.

This is not the only state pension correction currently underway, as a historical issue with HRP entitlements is also being addressed. An update on this exercise is expected shortly.

LCP partner, Sir Steve Webb anticipates that the total amount to be repaid will exceed £1billion. Speaking with Pension Age, he said: “The vast majority of those who lost were women, some of whom were underpaid for decades or even went to their grave never paid the right state pension.

“The remaining corrections need to be handled as a matter of urgency. This should never be allowed to happen again.”