Married women could be owed millions of pounds in state pension underpayments.
A new report by pensions consultancy LCP is urging women to get the Department for Work and Pensions (DWP) to check their state pension record.
According to LCP, dozens of women have received lump sum repayments from the DWP, with an average refund of £9,000.
Some of the repayments were as much as £30,000, with LCP estimating that women have already been repaid several million pounds in total.
The reason for the state pension underpayments is that DWP only proactively checked records for women who married after March 2008.
State pension underpayments for married women was first raised by LCP in May.
The old state pension system allowed married women to claim a basic state pension of 60% of the full rate, based on their husband’s contributions, where this would be larger than a state pension based on their own contribution record.
From 17th March 2008 onwards, this uplift for married women should have been applied automatically to state pension payments.
However, before this date, the uplift required married women to make a second claim to have her state pension increased when her husband reached age 65.
Sir Steve Webb, partner at LCP, said:
It is good news that DWP is checking its records to find married women who have been underpaid. I have no doubt that in addition to the millions which have already been refunded, this process will result in tens of millions of pounds being paid over.
But this record check must be comprehensive rather than narrow. As things stand, many groups of women, including widows, divorced women and the over 80s will not get a call from the DWP, so they will have to ring up and ask for their state pension to be checked if they think they are being underpaid.”
It would be far more efficient for DWP to do a comprehensive record check, including alerting women who still need to make a claim for an uplift. Without this, this issue will rumble on and on, and women will continue to miss out on the pension that is rightfully theirs.
Within the LCP report, there are six distinct groups of people who could benefit from contacting the DWP for a state pension review. These six groups are:
-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;
-Widows whose pension is now correct, but who think they may have been underpaid while their late husband was still alive;
-Over 80s who are receiving a basic pension of less than £80.45, provided they satisfied a basic residence test when they turned 80;
-Widowers and heirs of married women, where the woman has now died but who was underpaid state pension during her life;
-Divorced women, and particularly those who divorced post-retirement, to check that they are benefiting from the contributions of their ex-husband.
The DWP is understood to be aware of a number of cases where individuals have been underpaid their state pension. Where they are aware of these cases, they have corrected their records and reimbursed those affected.