Married, divorced and widowed women being urged to check if they are being underpaid state pension

Women are being urged to check whether they are being underpaid the state pension after a government blunder left tens of thousands missing out on money they are entitled to in their retirement.

Married, divorced and widowed women are the three groups who may have been affected by the pension mishap – which has already led the Department of Pensions to pay out £750,000. 

Experts believe as many as 130,000 women may have been short-changed to the tune of up to £100million because of the error, which followed a change to the pension system in 2008. 

Previously some women, who reached state pension age before April 2016, could claim more than the basic state pension depending on their husband’s National Insurance contributions. 

The scheme swapped from a claiming system to an automatic one in 2008 – but some women were not given the automatic uplift. 

One 96-year-old woman was deprived of £117k over 20 years while others such as Anne Psaros, 79, have been paid back more than £10,000 – around the average amount paid back to each woman by the DWP so far.

The blunder was revealed following investigations by former pensions minister Sir Steve Webb and MailOnline’s financial section This is Money.

This is Money columnist Sir Steve and our pensions and investing editor Tanya Jefferies have highlighted the extent of the scandal since January and it featured in a report report by pensions consultants LCP (Lane Clark & Peacock) in May.

They say more than 160,000 people have visited a calculator on its website since it published the report, titled ‘Are tens of thousands of older women being underpaid state pension?’ 

Married, divorced and widowed women, as well as the heirs and successors of women who have been underpaid maybe able to claim a backdated refund.

LCP say that, while some women have been refunded by the Department for Work and Pensions (DWP), it is urging more women to get their state pension checked.

Some women have told LCP that they have received large lump sum repayments from the DWP, with the average refund it is aware of sitting at just over £9,000, but some amounting to more than £100,000.

Sir Steve Webb, a former pensions minister who is now a partner at LCP, said: ‘It is good news that DWP is checking its records to find married women who have been underpaid … But this record check must be comprehensive rather than narrow.’  

The issue has arisen because, under the old state pension system, which includes women who reached state pension age before April 2016, married women could claim a basic state pension at 60 per cent of the full rate based on their husband’s contributions, in cases where this would be bigger than the pension they could get based on their own contributions.

Before March 17, 2008, a married woman would need to make a claim to have her pension increased – but since that date the uplift should have happened automatically.

But LCP estimates that tens of thousands of ‘post-March 2008’ women have not had their pension automatically increased.

On top of this, tens of thousands of ‘pre-March 2008’ women are also thought not to have put in a claim to have their pension increased, and so have also been missing out.

LCP is urging six particular groups to contact the DWP to see if they could be entitled to more state pension.

These include married women whose husband turned 65 before March 17 2008 and who have never claimed an uplift to the 60 per cent rate, widows whose pension was not increased when their husband died, and 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.

Also included are over-80s who are receiving a basic pension of less than £80.45, widowers and heirs of married women, where the woman has now died but was underpaid state pension during her lifetime and divorced women, particularly those who divorced after retirement, to check that they are benefiting from the contributions of their ex-husband.

Sir Steve added that he is aware of ‘pre-March 2008′ women who had not made a claim at the time their husband retired only receiving 12 months’ worth of backdated payments when they did eventually make a claim, despite missing out on state pension uplifts for at least 12 years.

He said some of these women are in the process of approaching the Parliamentary and Health Service Ombudsman and he has written in support.

A spokesman for the DWP said: ‘We are aware of a number of cases where individuals have been underpaid state pension. We corrected our records and reimbursed those affected as soon as errors were identified.

‘We are checking for further cases, and if any are found awards will also be reviewed and any arrears paid.’

The DWP said it would encourage anyone who thinks they have failed to claim a state pension increase they are eligible for to contact the department.

Helen Morrissey, pension specialist at Royal London, said: ‘The benefits system is extremely complicated and here is another instance where people are falling through the cracks and not getting what they are due.

‘These payments could have an enormous impact on their standard of living and we urge any woman who thinks they might be eligible to check as soon as possible.’

The family of Rosemary Chattell, 96, say they had queried her £77-a-week pension before, only to be repeatedly told by DWP officials that she was getting the correct amount. 

They later called back to say his mother was owed £107,852.58. 

After sending two letters to the DWP requesting interest on top. The DWP also later added interest of £9,447.20.

Anne Psaros, 79, was delighted to be handed £11,600 after realising that the DWP had failed to upgrade her pension to the married woman’s rate when husband retired more than ten years ago.

Her pension has also gone up by £23.52 a week to £80.45.

Anne, of Poole, Dorset, contacted the DWP after husband Anthony, 76, read about the scandal in our report. ‘I am so chuffed that my husband read about it in the Mail. We could not get over our luck.’

Lynda Hallaway, 74, had been receiving only £57 a week — despite her husband John, 73, reaching pension age in 2012 

The mother-of-two, from New Ellerby, near Hull, has seen her pension hiked to £80.45 and had a back payment of £9,160.

Lynda says: ‘I would encourage anyone who thinks her pension is being underpaid to get it checked.’   

Pension rules mean that once someone turns 80, they should receive 60 per cent of the full basic rate. This is irrespective of marital status and their NI contribution record.

Those turning 80 should automatically receive the ‘Category D’ pension rate of £80.45 a week as long as they have lived in England, Scotland, Wales or a European Economic Area country for ten of the past 20 years.

It means most women over the age of 80 should receive at least the married woman’s rate.

But there could be tens of thousands of women over 80 not receiving that amount. The scandal comes after women born in the 1950s have been made to wait up to six more years for their state pension after the Government raised the qualifying age from 60 to 66.

A DWP spokesman says: ‘In a number of cases individuals have been underpaid state pension. We corrected our records and reimbursed those affected as soon as errors were identified.

‘We are checking for further cases. If any are found, awards will be reviewed and any arrears paid.’

To see if you might have missed out, visit lcp.uk.com/is-your-state-pension-being-underpaid/.If you think you’ve been underpaid, call the Department for Work and Pensions on 0800 731 0469.