Scores of retired women have won back payments worth up to £17,000 after being short-changed on their state pension.
The scandal involves married women, widows and divorcees who are entitled to a pension rate based on their husband’s National Insurance contributions.
Analysis by former pensions minister Sir Steve Webb found that tens of thousands of women were likely not being paid the amount they were due, following investigations by This is Money columnist Sir Steve and our pensions and investing editor Tanya Jefferies that revealed the extent of the blunders.
This is Money’s investigations since we uncovered the state pension problems early this year have won back hundreds of thousands of pounds for those affected.
Since we published details of the scandal, the Department for Work and Pensions (DWP) has already paid out at least £750,000 — but Sir Steve says the true figure owed must run into millions of pounds.
Older women and their families are now being urged to check their state pension is correct. Back payments from the DWP are worth an average of £9,000.
Women who reached state pension age before April 2016 are entitled to claim a pension worth 60 per cent of their husband’s full basic state pension rate when he turns 65.
The basic state pension now pays £134.25 a week, so a woman getting less than £80.45 may be missing out.
The DWP was supposed to automatically upgrade such women’s pensions after March 2008, while those whose husbands reached state pension age before that date had to claim it themselves.
The DWP is now checking its records for married women who may not have received the correct rate since March 2008.
It comes after we revealed last month how vital letters informing women they were entitled to the better rate were sent to their husbands, rather than them.
Under the old state pension rules, widows are entitled to the same basic state pension as their husband. And former wives can also claim a pension based on the NI contributions of their ex-husband up to the date of divorce.
Families of women who have since died will be entitled to claim any cash they missed out on.
Meanwhile, all pensioners over 80 who’ve lived here for the past ten years are entitled to at least 60 per cent of the basic state pension, regardless of marital status.
But Sir Steve’s analysis revealed that tens of thousands of women were getting less than 60 per cent of the full basic state pension.
Sir Steve, now a partner at pensions consultancy LCP, says the Government’s investigation would probably result in tens of millions of pounds being paid out.
But he says: ‘This record check must be comprehensive, rather than narrow. Otherwise, this issue will rumble on and on and women will continue to miss out.’
The lump sum back payments will be taxed as if the pension had been paid on time.
Anne Psaros, 79, was delighted to be handed £11,600 after realising that the DWP had failed to upgrade her pension to the married woman’s rate when husband retired more than ten years ago.
Her pension has also gone up by £23.52 a week to £80.45.
Anne, of Poole, Dorset, contacted the DWP after husband Anthony, 76, read about the scandal in our report. ‘I am so chuffed that my husband read about it in the Mail. We could not get over our luck.’
Lynda Hallaway, 74, had been receiving only £57 a week — despite her husband John, 73, reaching pension age in 2012.
The mother-of-two, from New Ellerby, near Hull, has seen her pension hiked to £80.45 and had a back payment of £9,160.
Lynda says: ‘I would encourage anyone who thinks her pension is being underpaid to get it checked.’
To see if you might have missed out, visit lcp.uk.com/is-your-state-pension-being-underpaid/.If you think you’ve been underpaid, call the Department for Work and Pensions on 0800 731 0469.