Bereaved relatives have been asked to repay state pensions that were wrongly sent to people who have died by the Department for Work and Pensions (DWP).

The DWP has confirmed it has no legal right to reclaim the money but argues that it does so to protect public funds. Former Pensions Minister Sir Steve Webb says the letter the department sends out to families does not make it clear the repayments are voluntary. Over the past five years, the DWP mistakenly paid more than £500m in state pensions and pension credits to the deceased, external, recovering about half from bereaved relatives. This situation can arise if there is a delay in reporting a death - or in the DWP processing it - causing further pension payments to be issued.

As a result, part of that payment may cover a period after the person has died. In the latest year, £144m was overpaid in state pensions by the DWP after a person's death due to delayed reporting. The department recovered £67.3m, leaving £76.7m in unrecovered overpayments. Sir Steve, who is a partner at pensions consultancy LCP, used a Freedom of Information request to see a copy of the letter the DWP sends out to families and executors.

It revealed that while the department asks for the money to be returned to protect public funds, it does not state that repayment is voluntary. AAD Readmore