State pension payment delays

Hundreds of new pensioners could face anxiety and stress owing to delays in payments of their state pension, campaigners have said. The Department for Work and Pensions admitted that the pandemic and staffing issues had caused backlogs in payments to those reaching the age of 66. It is understood that the number affected is in the low thousands and officials have apologised to them. Pensions Minister Guy Opperman told MPs that hundreds of department staff were being redeployed to deal with the backlog in payments. A DWP spokesman said: “We are sorry that some new state pension customers have faced delays receiving payment”. Apparently, all those affected have been identified and DWP have deployed extra resources to process these as a priority. Any claims made today should not be subject to delay. Those without their money should be paid automatically, and Mr Opperman said that the system would be back to normal by the end of October. The DWP is already facing criticism and a heavy workload after it emerged that an estimated 200,000 female pensioners are collectively owed up to £2.7bn after the under-payment of state pensions owing to historic errors at the department. Pensioners were also told earlier that the “triple lock” formula for annual state pension increases would be suspended for a year. The move follows government concern that a big post-pandemic rise in average earnings would have meant pensions increasing by 8%. Now, the average earnings component will be disregarded in the 2022-23 financial year, with the rise based only on the higher of the consumer inflation rate or 2.5%.

Past performance is not a reliable guide to the future. The value of investments and the income from them can go down as well as up. The value of tax reliefs depend upon individual circumstances and tax rules may change. The FCA does not regulate tax advice. This newsletter is provided strictly for general consideration only and is based on our understanding of law and HM Revenue & Customs practice as of September 2021 and the contents of the Finance Bill. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.