Tens of thousands of women underpaid state pension after admin blunder

Pensions minister pins blame on junior civil servant.

Tens of thousands of retired women missed out on extra state pension payouts due to a record-keeping error, a senior government minister claims.

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 has found that many have missed out as they were unaware they could make a claim.

Speaking to MPs this week, pensions minister Guy Opperman blamed manual errors for the faults.

He told MPs: “There is a junior civil servant at the Department [for] Work and Pensions, who at some stage sometime 12 to 20 years ago failed to uprate a particular entitlement of a particular person.

“Not everybody, in fact we’re quite clear it’s definitely not the majority, but some individual claims have not been manually uprated by an individual working in a pension centre.

“We then have to find those individual cases and then we have to try and reassess them.”

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.

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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.

The Department for Work and Pensions has since moved to automated systems, and there is a 100-strong team in the department now looking at claims.

Andrew Neligan, wealth manager for Neligan Financial, describes the development as “poor form by the government”.

He says: “Any individual should be able to trust that the information they have been given by the government is fair and accurate.

“If it were the other way round, any individuals who miscalculated their income on a tax return from years ago would have to pay a significant amount of interest on the liability and accompanying fines.”

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Neligan says the state pension is a major part of many households’ retirement income and women who have been affected by this may have had to adjust and manage on a smaller income.

He adds: “The monetary amount may prove to be negligible but for low-income households it can make a big difference.”