Tens of thousands of women missing out on £100m in state pension uplifts - Webb

Tens of thousands of married older women could be entitled to a higher rate of state pension than they are receiving, analysis by Lane Clark and Peacock (LCP) has revealed.

The firm has highlighted issues around state pension uplifts that are "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.

The problem affects those women who reached state pension age before 6 April 2016 and are covered by the ‘old’ state pension system, under which, married women could claim an enhanced rate of state pension when their husband reached 65 in cases where they only had a small individual state pension entitlement, with parallel rules for widows and divorced women.

At current rates, this can represent as much as £80.45 a week, equivalent to 60 per cent of the full basic state pension rate of £134.25.

Data obtained through a freedom of information request by LCP partner, Steve Webb, has now revealed that "tens of thousands" of married women who are eligible for this rate are not receiving it, with thousands of widows and divorced women also impacted.

According to the firm, the majority of cases are due to individuals failing to actively claim for the uplift, however, it highlighted that some cases reflected the “failure of Department for Work and Pensions (DWP) computers” to automatically award the uplift.

Whilst women used to have to claim the additional uplift, a rule change in March 2008 meant that married women on low pensions should have been awarded this 60 per cent rate automatically when their husband turned 65.

However, where women needed to make a claim and do so only belatedly, they can only backdate their claim for 12 months, with any uplift for prior years lost.

Furthermore, thousands of women aged over 80 are thought to be missing out on a further £80.45 pension, which they are entitled to on a non-contributory basis, provided that they satisfy a residency test.

The firm emphasised that it is “difficult to put precise figures on the numbers missing out”, but estimated that the total amounts underpaid could be as much as £100m, not including ongoing increases in regular pension payments, with some women owed backdated payments of thousands of pounds.

Webb has now called on the government to investigate the issue “as a matter of urgency”, and to automatically uplift the pensions of all who are entitled.

He has also called for a review of the 2008 rule change, which meant that those who became entitled to a higher pension before that date can only backdate a claim for 12 months.

Webb added: “It is truly shocking that thousands of women are being short-changed on their state pensions.

“The system is highly complex and few will be aware of the special rules for married
women, widows, divorced women and the over-80s.

“Yet each of these groups seems to be losing out in different ways. Whilst the DWP is willing to put things right on a case-by-case basis when individuals get in touch, there is clearly a systematic problem here.

“It is time for the DWP to take this issue seriously and launch a full investigation into how so many women have been missing out for so long”.

In response, a DWP spokesperson 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."

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