200,000 retired women owed up to £13,500 for unpaid pensions
Around 200,000 women could be in line for payouts of up to £13,500 after state pensions were underpaid since law changes in 2008.
An administration error with enhanced pensions revealed by the Government yesterday suggested the issue goes back years.
The errors have been estimated by the Department for Work and Pensions (DWP) to cost around £3 billion.
Among the people affected are married women whose husbands reached pensionable age before 2008 and who were unknowingly entitled to an ‘enhanced pension’ that would have boosted their payments by up to 60%.
Some of these pensions were not automatically increased when they should have been, the investigation between May and December 2020 found.
A repayment programme started in January 2021.
The DWP report said: ‘Our forecast reflects an initial estimate that it will cost around £3 billion over the six years to 2025-26 to address these underpayments.’
It warned that the costing ‘is subject to a high degree of uncertainty as the true extent of the underpayment is not yet established’.
Sir Steve Webb, a former pensions minister who is now a partner at pensions consultants LCP, which has previously heard about some refunds amounting to more than £30,000, said: ‘This figure is truly mind-numbing. When I first looked into this issue a year ago I had no idea it would explode into such a huge issue.
‘Repayments of £3 billion over the next five years could imply huge numbers of women have been short-changed, potentially for a decade or more.
‘The Government needs to devote serious resources to getting these repayments out quickly as these women have waited long enough.’
As the correction exercise requires an assessment of hundreds of thousands of cases, it could take many months to complete.
In some cases, people will have died, and payments will be made to the appropriate person in these instances, such as next of kin.
Those whose husband reached state pension age prior to legislation changes in 2008 will still need to make a claim, but those whose husband reached state pension age after March 2008 should not need to take any action.
A DWP spokesman said: ‘The action we are taking now will correct the historical underpayments that have been made by successive governments.’
The six groups encouraged to contact the pension service to check State Pension entitlement.
1. Married women whose husband turned 65 before March 17, 2008 and who have never claimed an uplift to the 60 per ecnt rate.
2. Widows whose pension was not increased when their husband died.
3. Widows whose pension is now correct, but who think they may have been underpaid while their late husband was still alive, particularly if he reached the age of 65 after March 17, 2008.
4. Over-80s who are receiving a basic State Pension of less than £80.45.
5. Widowers and heirs of married women, where the woman has now died but was underpaid state pension during her lifetime.
6. Divorced women, particularly those who divorced after retirement, to check that they are benefiting from the contributions of their ex-husband.
To check if you might be eligible, you can also answer a few simple questions on the LCP online calculator here.
If you think you are affected call the pension service. Experts say those who phoned up have had money in their bank account one week later.
The best number to call is 0800 731 0469 but full contact details can be found on the Gov.uk website.
Get in touch with our news team by emailing us at webnews@metro.co.uk.
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