Thousands of women could be missing out on pension payments but the Government says it will not contact them
The Government’s response to findings that thousands of women could be getting the wrong state pension has been dubbed “woefully inadequate” by a former pensions minister.
Tens of thousands of older women are being underpaid by up to £100m for their state pension, according to a recent research paper published by pension consultants Lane Clark & Peacock (LCP).
But the Government has chosen not to contact women in this position, instead relying on them coming forward.
What is the problem?
The issue appears to be particularly acute for older married women who may not realise that they had to put in a claim for a higher pension when their husband turned 65.
Before the introduction of the new state pension system in April 2016, women could claim a partial state pension based on the National Insurance (NI) record of their husband if their own contributions did not entitle them to the married woman’s rate.
Under the old system you needed 44 years of NI contributions in order to claim the full basic state pension.
The pension that a married woman can claim based on her husband’s record of NI contributions stands at £80.45 per week, provided that their husband was receiving a full basic state pension. This is 60% of the full basic state pension rate of £134.25.
Since March 2008, married women on low pensions should have been awarded this 60% rate automatically when their husband turned 65. However, before this date they needed to claim the uplift, meaning thousands have missed out.
How much is owed?
In some cases, affected women could be owed backdated payments running into thousands of pounds and the total amount owed could be up to £100 million.
Pensions Minister Guy Opperman told the House of Commons that when individual cases were brought to the attention of the Department of Work and Pensions (DWP) matters had been corrected and encouraged others to come forward.
However, he ignored calls from Labour MPs that the DWP should actively contact women who had been underpaid.
Steve Webb, former pensions minister and partner at LCP, says: “With more and more women coming forward to report underpaid state pensions, there is no doubt that there is a systematic problem here. It is not good enough for the DWP to ask people to come forward one by one.
“The Government has had long enough to review this issue – it is time for action. DWP must use its own records to track down the women who are missing out as a matter of urgency. The current response to this issue is woefully inadequate.”
Have you been underpaid?
If you are worried that you have been underpaid for your pension LCP has a handy tool that can help you check.
All you have to do is enter few details about you and your husband to find out if you have been receiving too little.