State pensioners aged over 65 have been urged to check whether they are owed up to £7,000 following an erroneous underpayment by the Department for Work and Pensions (DWP).
Who Is Affected?
A blunder by the DWP has resulted in a significant number of women receiving less than their entitlement. Those affected include widows, divorcees, and women who rely on their husband's pension contributions for a portion of their pension. Further eligible women are those who reached state pension age prior to April 2016 and women aged 80 and above.
Background of the Error
The problem was identified by pensions consultancy firm Lane, Clarke & Peacock (LCP) in May 2020, with an official repayment scheme subsequently launched in January 2021. The error stems from computer failures combined with the DWP's failure to uprate women's state pension payments when their husbands reached state pension age, when they turned 80, or upon bereavement.
Who Is Not Affected?
Those who turned 65 after April 2016 will be receiving the new state pension amount and are therefore unaffected by the underpayment.
What Has the DWP Done?
The DWP claims to have written to those affected, yet many women report receiving no correspondence whatsoever, which explains why so many remain owed thousands of pounds. It is widely believed that numerous women passed away without ever receiving the correct amount.
Statistics and Investigation
More than 230,000 women are thought to have been underpaid, according to former pensions minister Sir Steve Webb. He said: "The vast majority of those who lost were women, some of whom were underpaid for decades or even went to their grave never paid the right state pension. The remaining corrections need to be handled as a matter of urgency. This should never be allowed to happen again."
Statistics reveal that 130,948 pensioners beyond State Pension age, predominantly women, have received their refunds. These payments vary from £2,192 to £12,486 based on their pension category, according to Homecare. The Parliamentary Ombudsman has initiated an investigation into the matter following LCP's revelation that women were unaware they needed to submit a separate claim to boost their pension after their husband's retirement. This information was only included on their husband's state pension form.
