Many women may have missed out on a full pension – Birmingham Post article 27.08.2020

It has taken months for the message to get out, but finally the latest pensions scandal is being addressed.

The issue is underpayments for women following a change to the system in 2008.

At the top end of the guestimates, there are claims that as many as 130,000 may have been short-changed to the tune of up to £100 million because of the error. However, it seems nobody knows for sure.

And it is particularly important that Midlands women are mobilised because the region is the nation’s pensions blackspot.

According to website This Is Money, it is home to six of the ten worst-performing areas in Britain for annual income from pensions.

In May last year, based on the then most recent figures available from HM Revenue & Customs, at £10,400 a year Leicester West had the lowest average annual pension pay-outs – including state pension – of all 650 constituencies in the country.

The others were Coventry North East, Leicester East, West Bromwich West, Birmingham Erdington and Stoke-on-Trent South.

The issue around Government blunders has been rumbling since January, led by This is Money, former pensions minister Sir Steve Webb and pensions consultants LCP (Lane Clark & Peacock).

It has seen many women come forward who have subsequently received lump sum repayments from the Department of Work and Pensions, with the average refund a little over £9,000.

One 96-year-old is said to have been deprived of £117,000 over 20 years.

More than 160,000 people have visited LCP’s website calculator to check whether they too could be due a windfall.

The essence of the problems is that under the old system married women could claim a basic state pension at 60 per cent of the full rate based on their husband’s contributions, where this would be greater than their own entitlement.

Since March 17, 2008, this uplift has been applied automatically. Prior to that date, a married woman had to make a “second claim” to have her state pension increased when her husband turned 65 – and many women failed to do so.

Sir Steve, a partner at LCP, told FT Adviser: “It is good news that DWP is checking its records.

“But this 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.”

A report by LCP has identified six groups who should contact the DWP for a state pension review.

These are:

  • Married women whose husband turned 65 before March 17 2008 and who have never claimed an uplift to the 60 per cent rate;
  • 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;
  • Over 80s who are receiving a basic pension of less than £80.45, provided they satisfied a 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;
  • Divorced women, and particularly those who divorced post-retirement, to check that they are benefiting from the contributions of their ex-husband.

According to LCP, a growing number of married women who never knew they needed to make a claim for an uplift (pre March 2008 women) are planning to make a complaint of ‘maladministration’ to the Parliamentary Ombudsman.

Clearly, there is a long way to go before all victims get justice.