Millions of people have been receiving the wrong pension for decades because of government IT failures, the BBC has learned.
The errors allegedly known since the 1990s have not been fixed to this day.
A former pensions minister described the scale of the problem as “truly overwhelming”.
The Department for Work and Pensions (DWP) says it is “investigating possible remedies”.
The official analysis released last month shows that 23% of retirees were underpaid while 17% were overpaid.
Some people have been both overpaid and underpaid in different years, with the vast majority of mistakes being worth a pence or two a week.
In 2002 it was decided by DWP officials that it would be too complicated to fix the problem and a solution has still not been found.
Sir Steve Webb, who served as Pensions Secretary between 2010 and 2015, said he was never made aware of the issue.
“The scale of these errors is really overwhelming,” he told the BBC.
“Although the absolute size of the bugs is usually small, the number of people potentially affected is huge. More worrying is the total lack of transparency.
“It is incredible to hear that a government agency could simply decide that it is acceptable to pay the wrong rate of pension for decades, but feel under no obligation to inform Parliament or the public.
“When the DWP has been sitting on this secret for decades, one wonders how many other things are just being swept under the rug.”
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The problem centers on the pension strategy computer system and its inability to accurately increase an element of the state pension called the graduated retirement pension.
The antiquated computer system, described by MPs as “not fit for purpose”, was introduced in the 1980s.
It was scheduled to close in 2020 but has temporarily continued.
In 2021, the National Audit Office found that problems with the system had separately resulted in 134,000 people who claimed their state pension before April 2016 not receiving their full entitlement. The average underpayment has been estimated at around £8,900.
This problem, which mainly affects widows, the divorced and women who depend on their husbands’ pension contributions for part of their pension entitlement, is expected to cost the Government £1.05 billion.
“It is worrying that the DWP’s IT systems have not kept up with the demands placed on them,” said Labor MP Sir Stephen Timms, chairman of the Special Committee on Work and Pensions.
“A lot of money has been spent on the Universal Credit program — it’s a good system — but other benefits, like the state pension, depend on aging and creaking systems.”
In a statement, the Department for Works and Pensions said the errors were “decades old” and “successive governments have not corrected this”.
“In 2002, given the complexity of the system and minimal impact on individuals, it was decided that no changes or corrections would be made until a new computer system was introduced. The ministry is assessing the extent of this problem and investigating possible remedies,” a spokesman said.
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