The LCP urges women to find out if state pension is being underpaid

06 August 2020

A recent LCP report asked: Are tens of thousands of older women being underpaid state pension? In response, over 160,000 people have since visited their calculator site and questions have been raised in Parliament, with several million pounds being refunded by the Department of Work and Pensions (DWP) to those women who were affected.

In a follow up report the LCP, summarises their findings since the first publication and gives detail over what needs to happen next. A vital message of the paper is to encourage a much wider group of women to come forward to check that their state pension is correct.

Under the old state pension system, married women could claim a basic state pension at 60% of the full rate based on their husband’s contributions where this would be bigger than the pension they could get based on their own contributions.

From 17 March 2008, this uplift to 60% should have happened automatically, whilst before that date a married woman had to make a ‘second claim’ to have her state pension increased when her husband turned 65. In the LCP’s initial paper, it was estimated that tens of thousands of ‘post March 2008’ women had not had their pension automatically increase and tens of thousands of ‘pre March 2008’ women had not put in a claim to have their pension increased and had therefore missed out for more than a decade.

LCP have reported that since the paper was published:

  • Dozens of women have notified LCP that they have received large lump sum repayments from DWP, with the average refund a little over £9,000, but some in excess of £30,000. Based on cases notified directly to LCP or reported on the ‘This is Money’ website or to other publications, LCP estimate that DWP has already refunded several million pounds to hundreds of women
  • DWP Ministers have urged those who think they are being underpaid to come forward, whilst the DWP press office says that the department is ‘undertaking a check of its records’ to find more cases

Correspondence with the DWP has disclosed that when men turned 65 they used to be sent two pension claim forms, one for them and one for their wife, rather than DWP sending the claim form directly to the married woman herself. Based on this, it appears that the DWP’s check of its records only relates to searches since March 2008. The new report produced by LCP identifies six additional groups who need to contact DWP to request a review of their state pension.

The six identified groups are:

  • Married women whose husband turned 65 before 17 March 2008 and who have never claimed an uplift to the 60% rate (currently £80.45 per week in basic pension)
  • 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, especially if he reached 65 after 17 March 2008
  • Over 80s who are receiving a basic pension of less than £80.45, provided they satisfy 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, especially where her husband turned 65 after 17 March 2008
  • Divorced women, and particularly those who divorced post-retirement, to check that they are benefiting from the contributions of their ex-husband

Commenting, 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”.


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