Older Women Are Owed £3bn in State Pension: Are You Entitled and What Can You Do About It?

“The Government is checking State Pension records. Where it is identified that someone is being underpaid, any backdated State Pension due in accordance with what the law allows will be paid.”

This is the Government response, from November 2020, to a petition signed by thousands of women to investigate the systematic underpayment of state pensions to certain groups of women.

From August 2020 to January 2021, The Department for Work and Pensions (DWP) launched an investigation into legacy computer systems to analyse millions of State Pension records after first being alerted to this by former pensions minister Sir Steve Webb, earlier in 2020.

From 2008, following a change in the law, when a spouse became entitled to their State Pension, some individuals should have had an automatic review of their State Pension and received an uplift to this. It is believed that although the DWP computer systems produces a prompt for anyone entitled to this uplift, it requires manual action and for many this simply did not happen.

“We are committed to making sure that those people found to have been underpaid State Pension receive the money they are rightly entitled to,” said the DWP. This was the update to the House of Parliament in March 2021. The Government, at the same time, confirming that they are rectifying these cases as “a propriety for the department and will do this as quickly as possible,” adding, “This is an issue that dates back many years across successive governments.”

The government is investigating, scanning and reviewing state pension records to identify those who should have received an automatic uplift to their state pension. Below is an outline of some of the groups of women affected who will be owed pay outs.

It is important to understand that this only applies to women who attained state pension age before April 2016. If you received your state pension after this time you will not have been affected as, after April 2016, the new state pension rules apply instead.

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Women who may be affected:

• Married women who hit state pension age before April 2016, whose husbands turned 65 on or after 17 March 2008 and who are being paid less than 60% of their husband's basic state pension.
• Widows whose pension did not change when their husband died (your state pension should have been reviewed at this time).
• Widows whose husband died after April 2008 and have been paid less than 60% of his state pension while he was still alive.
• Women who divorced after retiring and haven’t had their pension reviewed and reassessed.
• Women aged 80+ and who aren’t being paid a pension of at least £80.45 per week. These special rules can be found at https://www.gov.uk/over-80-pension/eligibility. If you're the heir of a woman who was underpaid state pension while alive and has since died. 
• Any individual who has not already been automatically contacted by DWP and who believes that they may be affected (and are being underpaid State Pension) should contact the Department for Work and Pensions either online or by telephone: 0800 731 0469.
• Online: https://www.gov.uk/contact-pension-service

If you require specialist advice, please contact a financial adviser authorised by the Financial Conduct Authority (FCA), Integrity365 advisers are more than happy to help, just get in touch.

Written by Peter Matthews ACII FPFS, Independent Financial Adviser/Chartered Financial Planner, Integrity365.

Customer service is at the heart of everything Integrity365 do, from the early days of pensions and ISAs to investments and lump sum decisions, through to retirement and later life planning, they are here to support you through the key stages of your life with a holistic approach to financial planning.