Retired women in line for extra £100 million in state pension

Government sets up special unit to investigate underpaid pension payments to thousands of women.

Tens of thousands of retired women are in line to get an extra £100 million due to state pension payment blunders.

Many married women who reached state pension age before April 2016 were entitled to receive a rate based on their husband's national insurance record, but an investigation found many have missed out.

Before March 2008, a retired wife on the lower state pension rate had to claim for an uplift worth 60% of her husband’s state pension.

This was supposed to have been automatic after March 2008. However, former pensions minister Steve Webb, now a partner at consultancy LCP, has uncovered cases where women were unaware that they had to previously make a claim or have not received the correct amount, according to This Is Money.

Retirees have received average payouts of £10,000, according to LCP.

Webb suggests the total amount owed could reach £100 million. He has launched a parliamentary petition urging the government to check all records including for widows, older married women and the over-80s who could have be underpaid.

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The petition has received more than 10,000 signatures, meaning the government must issue a response.

The Department for Work and Pensions (DWP) has already set up a 37-strong unit to investigate claims.

Peter Schofield, the permanent secretary for the DWP, told MPs last month that 11,000 people had been in touch so far, with 7,200 cases reviewed and 1,900 found to be receiving incorrect payments.

Becky O’Connor, head of pensions and savings for interactive investor, says it is a scandal that no-one acted sooner.

She says: “The years of hardship that some women have faced through surviving on lower incomes than necessary could have been alleviated with better communication from the government on their eligibility for the state pension based on their husband’s contributions.

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 “You can’t expect people to work these things out on their own when the system is so difficult to navigate as a result of so many changes over the years. A motivated few may do so but the majority won’t know about something unless they are told directly.”

She says it is not enough to just expect people to find information somewhere on a website.

O’Connor adds:

“The government has hopefully learned that picking up the pieces after something like this has come to light is harder work than sending information to people to prevent them missing out in the first place.”

The DWP says: “We are checking for further cases, and if any are found awards will also be reviewed and any arrears paid.”