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Government will not track down women owed £100m in state pension underpayments

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The government has been criticised for it’s "woefully inedequate response" to the issue of tens of thousands of married women receiving the wrong amount of state pension. A research paper published by pension consultants Lane Clark & Peacock suggests that tens of thousands of older women may be entitled to a higher rate of state pension than they are currently receiving.

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. But there also appear to be problems for other married women, for some widows and divorced women and for the over 80s. Since March 2008, married women on low pensions should have been awarded this 60% rate automatically when their husband turned 65 but before that date they needed to claim the uplift.

LCP says that in some cases, affected women could be owed backdated payments running into thousands of pounds and the total amount owed could be up to £100m. The issue was raised yesterday in the House of Commons for the first time. However the government’s response has been condemned as ‘woefully inadequate’ by Steve Webb, former pension’s minister and partner at LCP.

Speaking in the House of Commons, shadow pensions minister, Jack Dromey, said: "Case after case has been uncovered of retired women underpaid on their pension. Many don't know yet to this day. Some have tragically died before learning of the department's mistake. "When will the department work out how many women have been affected, who they are and bring forward a plan to contact them?"

Pensions Minister Guy Opperman told the House of Commons that when individual cases were brought to the DWP’s attention matters had been corrected and encouraged others to come forward. But he declined to take up the suggestion from opposition MPs that DWP should actively contact women who had been underpaid.

Steve Webb commented: “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.”

Posted by MMB Finance Swindon on 30 June 2020