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Married women owed £100m in state pensions: have you been short-changed?
Many people rely on state pension income to support them through retirement - and tens of thousands of women are being underpaid theirs, a Lane Clark and Peacock (LCP) investigation has revealed.
Women who are married and retired can obtain a state pension based on their husband's work record. However, it has been found that around 130,000 women could be receiving less than they should.
The shortfall in payments has been caused by a combination of complex rules about women's entitlement under the old pension system and computer errors by the Department for Work and Pensions (DWP).
Here, Which? explains why some women aren't receiving the right state pension income, and how you can claim your money back if you're eligible.
Who could be missing out on state pension payments?
The latest scandal affects women who were married and reached state pension age (SPA) before April 2016, who can claim the basic state pension. These women are entitled to 60% of the basic state pension their husband gets at SPA.
For 2020-21 the full basic state pension is £134.25 per week, and the rate for married women claiming on this basis would be £80.45 per week.
Under this old system each member of a couple could build up a pension in their own right. So, in principle, each member of a married couple could earn a full state pension.
But many women had gaps in their National Insurance (NI) record or had paid the specially reduced 'married woman's stamp', and so reached pension age with very limited pension entitlement of their own.
- To find out more, check out our comprehensive guide onhow NI contributions affect your state pension entitlement.
The women affected will have been born before 6 April 1953 and are most likely to be widows, married or divorced women and those aged over 80.
If you're a widow, you could also substitute your late husband's NI record for your own, thereby qualifying for 100% of the basic state pension if your late husband had a full record of contributions.
If you were divorced when you reached SPA you could substitute your ex-husband's NI record for your own, up to the point of your legal split. If the divorce occurred relatively late in life, this could enable you to qualify for a full basic state pension.
- Find out more:what is the state pension?
Why have some women been underpaid?
The LCP investigation, which was led by former pensions minister and LCP partner Sir Steve Webb, shows that there are two groups of married women who may have been underpaid state pension benefits.
Until March 2008, a married, divorced or widowed woman would have to make a claim to receive this enhanced pension.
For women whose husbands reached SPA (which was then 65 for men) after March 2008, the DWP's computer systems should have boosted their state pension payments to the 60% sum. But many women have said that it didn't, and have complained to the DWP.
The second group of women who have been affected are those whose husbands reached 65 before March 2008.
According to LCP, the DWP claims it wrote to these women to alert them of this option but many say they never received such a letter.
- Find out more: April 2020 state pension payment increases
Has the DWP backdated all payments?
For the group of women whose husbands reached SPA after March 2008, the government department says it has backdated these payments, plus interest on top.
Unfortunately for women whose husbands reached SPA before March 2008 and who want to claim now, it would be treated as a 'new claim' for a pension and therefore backdated by just one year. This means that over a decade of pensions will have been lost.
LCP says there may still be women who haven't received the right state pension payments, and is urging the government to identify and alert women who may have been affected and reimburse them.
The DWP says: '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.'
- Find out more: can I top up my state pension?
How can I check if I'm eligible to claim?
LCP has created a calculator to help you identify if you may be affected. You'll need to enter some details about you and your husband (or husband at the time), including when you were born, whether your husband is over SPA, how much basic state pension you currently receive and how much your husband (or ex-husband) receives.
You'll then be given an indication of whether you're receiving less than you're entitled to.
LCP says all data is given anonymously and it doesn't store any of the personal data you input.
However, if you have any concerns or questions about your pension you should contact the government's Pension Service or talk to a regulated financial adviser.
- Find out more: how to get financial advice
Where can I find out more about the state pension?
Check out our pensions guides for more information about the state pension and planning for retirement:
- Use our state pension calculator to see when you qualify
- Work out how much state pension you'll get
- Find out how the coronavirus pandemic is impacting pensions and investments.
Read the latest coronavirus news and advice from Which?.
