Hundreds of thousands of women over the age of 70 are being underpaid for their state pension to the tune of £1,000 a year.
The Department of Work and Pensions (DWP) is currently in the middle of a multi-year correction exercise to identify more than 200,000 women who are being paid too little state pension. It is searching its records to find these people to contact them and pay arrears.
However, an document supplied by DWP to an appeal tribunal last year reveals there are another group of older women who are also not receiving the correct amount- and who the government department has no plans to contact. Hundreds of thousands of women are affected.
Commenting, Steve Webb, partner at LCP who played a key role in unearthing the errors, said:
“The scale of these state pension errors is so great that DWP still has a billion pound mountain to climb in terms of identifying underpayments and putting them right.
“It is vital that the department devotes extra resources to make sure that huge numbers of people are moved on to the correct rate of pension as a matter of urgency. With the current cost of living crisis it is hard enough for older people to cope, without having to get by on a pension which is too low due to official error.”
Below are the details on who are affected and how you can make sure you are being paid the correct amount.
Am I owed money?
The group of people affected are married women who are not getting the full basic state pension and whose husbands are now aged 80 or over.
The “married woman’s rate” applies to women who were able to pay a reduced rate of national insurance in the expectation of claiming on their husband’s record in retirement, on the now outdated assumption a man would be the main earner in a couple.
This was designed to allow parents to reduce costs when bringing up children – and then, on retiring, they could claim a “married woman’s rate” that would bump up their state pension to 60 per cent of their husband’s basic state pension.
Only, this often didn’t happen and now some women are receiving less than the £85 a week which they should be if their husband has a basic pension of £141.85.
Before March 2008, you had to claim for married woman’s rate directly, but after that date, it should have happened automatically.
There were problems with both groups receiving their money, but the DWP is only contacting the latter group and not the former. It argues that the onus is on those women to know about this entitlement and claim it, but campaigners say many won’t be aware of this and will be continuing living on less than they are entitled to.
How much are they missing out on?
The exact amount these women are missing out on will vary, but shortfalls of £20 per week would be common, meaning they could easily be missing out on £1,000 per year or more.
Until now, it was unclear how many women were in this situation, but a document submitted by the DWP to a tribunal hearing last year says that the department has scanned its computers and “in the low hundreds of thousands” of women could be in this position.
The disclosure said: “After 17 March 2008, married women in this position should have got an automatic uplift to the 60 per cent rate when their husband drew his pension, and if this did not happen, DWP will try to find people and put things right.
“But for the ‘pre March 2008’ women, DWP has excluded them from the correction exercise because the onus was on the women to claim the uplift. The DWP submission to the tribunal is believed to be the first official estimate of the numbers who could potentially benefit from an uplift.”
All of these women have potentially been missing out on a higher pension for at least 15 years. If they applied now they would get an increase but it would only be backdated for 12 months.
How can you ensure you get paid properly?
If you reduced your NI credits, and your husband is on the basic state pension rate of £141.85, then you should be getting £85 in basic pension – so if you are not you need to claim the uplift.
If your husband gets less than £141.85, the amount you are entitled to is scaled down pro rata, so if he receives £100 you would be entitled to £60, for example.
LCP has a web page where married women can check if they are on the correct rate of basic state pension. This can be found at www.lcp.uk.com/underpaid.
To claim, you can contact the pension service online or call on 0800 731 0469. Make sure you have the following details to hand:
- Your name, date of birth and NI number
- Current annual basic state pension – you should be able to find this on your latest annual statement, but if not, give the total weekly or monthly amount
- Husband’s name, date of birth (and date of death if this applies) and NI number
- His current basic state pension, or last known before he died
You’ll then be told whether you’re receiving less than you’re entitled to.
Mr Webb said: “It is shocking that the Government knows that hundreds of thousands of older married women could be on a higher pension but has done nothing to make them aware in the 15 years or more since their husband retired.
“I would encourage any married woman with a husband over 80 and who has a basic pension under £85 per week to check if she may be entitled to a higher pension.”