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One in three pensioners is getting the wrong benefit payments, the government has admitted.
More than one million elderly people received incorrect pension credit payments last year, figures released by the Department for Work and Pensions revealed.
The incorrect payments made up 36.5 per cent of all pension credit payments last year. In 84 per cent of cases, mistakes were caused by official error rather than by fraud or customer error.
Last year, £200m was overpaid and £90m was underpaid.
Liberal Democrat work and pensions spokeswoman Jenny Willott, who obtained the figures, said: "Pension credit is so complex even officials can't understand it. It is no wonder that so many people are put off claiming it.
"It is outrageous that money that should be going to hard-up pensioners is not reaching them."
Currently 2.6 million pensioners on very low incomes claim pension credit.
Since pension credits were introduced in 2003, official mistakes have led to £760m being overpaid and £412m being underpaid.
Willott added: "The government must scrap complicated benefits for pensioners and introduce a universal, higher state pension which increases in line with wages. This is the only way to deliver a fair deal for all pensioners."
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