State pension UK: Women underpaid set to receive money back as DWP provides update

Guy Opperman quizzed on state pension underpayments

State Pension payments are a key source of income for retired people upon leaving the workforce. However, in recent months, research undertaken by the firm Lane, Clark and Peacock (LCP) has shown tens of thousands of women have potentially been underpaid their state pension. Women have been urged to check their state pension sum, as the complex rules surrounding the matter could mean some have missed out.

The DWP has admitted to the blunder which affects women in certain instances, and this week, provided further insight into the situation.

Pensions Minister Guy Opperman spoke to MPs this week, and explained the reason why the issue occurred.

He said: “What we’re dealing with here is a junior civil servant at the Department for Work and Pensions, who at some stage sometime 12 to 20 years ago failed to update a particular entitlement of a particular person.

“Not everybody, in fact we’re quite clear it’s definitely not the majority, but some individual claims have not been manually uprated by an individual working in a pension centre.

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“We then have to find those individual cases and then we have to try and reassess them.”

Under old state pension rules, married women were able to claim a basic state pension sum at 60 percent of the full rate based on the National Insurance contribution made by their husband.

However, this will only be allowed if the sum is bigger than the pension a woman would have received based on their own contributions.

The uplift to the state pension sum should have been applied automatically since March 17, 2008.

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However, it is estimated a proportion of women did not have their pension increased in this circumstance.

But before this date, women will have been required to make a “second claim” to have a state pension sum increased.

In this case, women should have received a letter from the DWP to inform them about the option to increase the state pension sum.

But some women have spoken out to state they did not receive any correspondence concerning the issue. 

Mr Opperman explained the issue further, highlighting the matter as a “significant legacy issue”.

He stated each case would have to be investigated by the DWP on an individual basis. 

There is now a team of 100 people at the DWP who are now looking into the issue further, as well as claims. 

Sir Steve Webb, former pensions minister and partner at LCP, recently encouraged women to be proactive about the matter and make a claim if they believe they could be entitled to back payments. 

Back in 2020, the permanent secretary at the DWP, Peter Schofield, provided evidence to the Work and Pensions Select Committee on the matter.

He said: “I can tell you we have received almost 11,000 cases.

“We have reviewed 7,200 of them, and 5,300 of them turned out to be correct.

“The challenge at the moment for us is that we need to work through each of these cases. They are quite complex calculations.” contacted the Department for Work and Pensions (DWP) concerning the matter of state pension underpayments.

A 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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