MPs call state pension shortfalls for women a 'shameful shambles' - here's how to check to see if you are owed money
An administrative error that resulted in decades of state pension underpayments, particularly for women, has been called a "shameful shambles" by a public spending watchdog. But if you think you've been affected and underpaid it's important you check to see if you are owed money.
The Department for Work and Pensions (DWP) estimates it has underpaid 134,000 pensioners, mostly women, more than £1 billion, with some errors dating as far back as 1985.
The Public Accounts Committee (PAC), which is made up of a cross-party group of MPs, today (21 January) said the errors were due to complex pension rules and a reliance on highly manual systems, and that many of those affected have sadly since died. The committee added that there is currently no formal plan for contacting the next of kin where a pensioner who was underpaid has died.
The errors mostly affect widows, divorcees and women who rely on their husband’s pension contributions for some of their state pension. It is estimated that the average amount those affected have been underpaid is almost £9,000. See below for more details, as well as our guide: Are you one of 10,000s of women missing out on £1,000s of state pension?
'DWP can never make up what people have actually lost and in many cases it’s not even trying'
The Government's repayment programme was launched in January 2021 after the issue was first highlighted by former pensions minister Sir Steve Webb in 2020. It prompted an investigation by the DWP, carried out between May and December 2020, which revealed there had been a systematic underpayment of state pensions to certain women.
The PAC said the cost of fixing the errors is expected to cost £24.3 million by the end of 2023, and that there had been knock on effect for those trying to claim their state pension for the first time, as staff have been moved away from their usual work, slowing the process of dealing with new applications.
Dame Meg Hillier, chairwoman of the PAC, said: “In reality DWP can never make up what people have actually lost, over decades, and in many cases it’s not even trying. The DWP is now on its ninth go at fixing these mistakes since 2018.
"And there is no assurance that the errors that led to these underpayments in the first place will not be repeated in the correction exercise. This is a shameful shambles.”
Errors mostly affect widows, divorcees and women who rely on their husband’s pension contributions
The following groups of women will be owed automatic pay-outs. They initially missed out on a top-up due to a DWP IT failure:
- Married women who hit state pension age before April 2016 and whose husbands turned 65 on or after 17 March 2008. This applies if your state pension is less than 60% of your husband's basic state pension.
- Widows whose pension wasn't increased when their husband was still alive. This applies if you hit state pension age before April 2016 and got less than 60% of your husband's basic state pension while he was still alive.
- Widows who may have been underpaid since their husband died. Widows will often see their basic state pension increase when their husband dies, based on their late husband's contribution, plus some get extra on top from the 'second state pension'.
- Women aged 80+ who get a state pension of less than £80.45 a week – whether they're married, widowed, divorced or single. This little-known 'category D' non-contributory state pension isn't dependent on the national insurance contributions you or your spouse may have made.
- If you're the heir of a woman who was underpaid state pension while alive and has since died.
But it's not just the women detailed above who may be missing out on a state pension boost. Others could be due cash too, although they won't be covered by the Government's redress scheme. If you fall into any of the below two categories you'll most likely need to contact the Government to get your money back.
- Married women who hit state pension age before April 2016 and whose husbands turned 65 before 17 March 2008.
- Divorced women who should have benefited from their ex-husband's national insurance record.
How to check if you're owed money and claim your payout
To check if you have been underpaid and are owed, contact the Pension Service and ask about your situation (also do this if you fall under any other categories but want to be sure you will get what you're owed). You can:
- Call 0800 731 0469 (press option two).
- Or write to:
The Pension Service
Post Handling Site A
- Or you can find alternative contact details on the Pension Service website.
See our Are you one of 10,000s of women missing out on £1,000s of state pension? guide for the full details on how to claim and what you need to know depending on your situation.
What does the DWP say?
A DWP spokesperson said: “Resolving the historical state pension underpayments that have been made by successive governments is a priority for the department.
“We have set up a dedicated team and devoted significant resources to processing outstanding cases, and have introduced new quality control processes to help ensure this does not happen again. Those affected will be contacted by us to ensure they receive all that they are owed.
“We are carefully considering the Public Accounts Committee’s report and will respond in due course.”
Additional reporting by the Press Association.