Guest post: "Thousands of women may have been underpaid £10,000s from their state pension - how to claim"

(34 Posts)
JuliaMumsnet (MNHQ) Thu 22-Apr-21 16:27:38

Thousands of older women are being underpaid their pensions. Pensions commentator and former pensions minister Steve Webb explains why this has happened, who is affected, and which of these groups will not be contacted but will have to make an active demand to get what they are due - including one group of about 5,000 women who are only getting about £1 a week. Thanks to Mumsnet user Viques for suggesting we launch a campaign to help find the 5000. To get involved, click here.

When I published a research paper a year ago entitled “Are thousands of older women being short-changed on their state pension?”, little did I realise that the answer would be that nearly 200,000 women have been underpaid around £3 billion. Amazingly, the simple calculator that we created to help people understand the issue has had over half a million views since then.

The good news is that Department of Work and Pensions (DWP) has said that it will now check hundreds of thousands of records and will contact people where it finds errors. The groups it is actively looking for are:

- Married women on the ‘old’ state pension who should have been automatically upgraded to a 60% basic pension when their husband turned 65 but where this did not happen; broadly speaking, these are cases where the husband turned 65 on or after 17th March 2008, when the automatic uplift was introduced.

- Widows on the old system whose state pension should have been reassessed when their husband died but where this did not happen.

- People aged 80 or over not receiving the £82.45 per week ‘Category D’ pension rate which depends purely on a simple residence test and is not based on National Insurance contributions.

However, it would be a mistake to think women on a state pension can simply wait for a cheque to drop through their letter box. There are several groups of women who could improve their state pension but only if they take action.

The first is married women not getting a 60% basic pension (currently £82.45 per week where the husband is on a full basic pension) and whose husband turned 65 before 17th March 2008. Before that date, women only got the married woman’s rate if they put in a claim. DWP are not looking to contact these women as the Government’s position is that the onus is on the woman to claim. If you are in that position, you need to put in a claim. Although it will only be backdated 12 months, the sooner you claim, the sooner your pension will be increased. (We are however complaining to the Parliamentary Ombudsman about this whole system as many women were clearly unaware of the need for this ‘second’ state pension claim).

The second group who should get on the phone is women on the old state pension who divorced after starting to draw their state pension. Such women can potentially get a substantially increased state pension by using their ex husband’s National Insurance record. But DWP will only do this calculation once they are notified of the divorce. If you don’t tell them about your divorce, nothing changes.

The third group is a small group of women who have zero entitlement to basic state pension, and who may just be getting a pound or two a week in total. This usually comes from the old ‘Graduated Retirement Benefit’ scheme which ran in the 1960s and early 1970s. These women are in a special position because even if their husband turned 65 before March 2008 they can still make a claim which will be backdated all the way to their husband’s 65th birthday.

We think that there are probably around 5,000 women in this last group in Great Britain and the backdated amounts they can receive can be huge. I have recently helped three such women who got lump sums of between £30,000 and £60,000 as well as a big increase in their weekly state pension.

For the three groups I suggested should contact the DWP, I appreciate that contacting the Department can be very difficult. The best number to call seems to be 0800 731 0469. You should ignore the message that encourages you to ring off or go to a website. You then choose an option from the menu that best fits what you are ringing about, and you need to be prepared to hold on, but you should eventually get through.

Finally, all of the discussion so far has been about the old state pension system, for those who reached pension age before 6th April 2016. But growing numbers of people reached state pension age after this date. The new state pension is very different and the provisions for women to derive pensions from a late husband are much more limited. But there is some provision for widows (and widowers) and I am starting to hear reports that this is not always working in practice. We have created a new website to help you check which is at www.lcp.uk.com/newstatepension

Steve will be coming back on the thread on Friday 30th April at 3pm to answer questions - so get posting below if you have any.

Steve Webb is a former pensions Minister and is now a pensions commentator and partner at consultants LCP.

OP’s posts: |
Thecatonthemat Thu 22-Apr-21 17:48:33

Thank you for this information. However it would be good if the Govt were to review the situation for all women born in the 50s and later. The changes have meant poverty for millions of women and unemployment . Who are still expected to care for relatives for no recompense. Plus the advantages available to those who came before have also been removed.

ColdCottage Thu 22-Apr-21 19:29:16

Thanks. I've just sent this to my mother.

unwashedanddazed Thu 22-Apr-21 23:51:51

Thank you for this. I'm going to check my mum's entitlement after reading this. This is the first explanation of the situation I've seen that makes clear who is affected.

PaulaTrilloe Sat 24-Apr-21 05:41:46

I will let my mum know thank you

MediocreOne Sat 24-Apr-21 07:20:34

This happened to my mum. She had been underpaid £20,000, got it paid back last year.

TheShadowyFeminist Sat 24-Apr-21 11:29:59

This looks really informative. I'll be speaking to my mum about this later. Thanks for the information.

SisterWendyBuckett Sat 24-Apr-21 13:19:00

Thank you. Also just sent the information to my Mum!

EwwSprouts Sun 25-Apr-21 21:12:31

Just asked my mum. I think she gets nothing.

RowanMumsnet (MNHQ) Mon 26-Apr-21 09:52:46

Hello - Mumsnet user @Notnowjo on this thread asked an interesting question: 'surely the need for some women to make a second pension claim is direct sex discrimination, because it is only women not men?' - would be interested in your thoughts on this?

Itsabeautifulday81 Mon 26-Apr-21 11:35:34

Wouldn’t gransnet be more appropriate ?

JustGotToKeepOnKeepingOn Mon 26-Apr-21 12:52:08

@Itsabeautifulday81 My mum is 80 and doesn't even know how to log onto the internet (despite being shown how to many times). I can get this information to her and help her see if she's entitled to anything.

Posting on gransnet in addition to posting on here would be good but we need the info on here so that we can look after our elderly mums and grandmas and get them want they deserve.

Itsabeautifulday81 Mon 26-Apr-21 13:52:27

JustGotToKeepOnKeepingOn

*@Itsabeautifulday81* My mum is 80 and doesn't even know how to log onto the internet (despite being shown how to many times). I can get this information to her and help her see if she's entitled to anything.

Posting on gransnet in addition to posting on here would be good but we need the info on here so that we can look after our elderly mums and grandmas and get them want they deserve.

Good shout

WutheringBites Tue 27-Apr-21 19:03:56

What happens to women who lost out in these situations and have since died? Is the money lost forever?

PJ04JCW Tue 27-Apr-21 22:29:14

WutheringBites

What happens to women who lost out in these situations and have since died? Is the money lost forever?


I'm wondering about this. My mum died 3 years ago at the age of 76. She divorced in 1979. Am I entitled to claim on her behalf? I'm her only child.

cheekaa Wed 28-Apr-21 04:57:02

WutheringBites

What happens to women who lost out in these situations and have since died? Is the money lost forever?


I would like to know the answer to this question as well. My mum died 4 years ago. As her executor I need to know if a claim is due.

doublehalo Wed 28-Apr-21 09:04:41

Great thead. Let's get the information out there.

shewalkslikerihanna Wed 28-Apr-21 09:54:57

Am I right in thinking if the widow has passed away, relatives can claim

shewalkslikerihanna Wed 28-Apr-21 11:13:08

Actually they can
Have just rang to ask

cheekaa Wed 28-Apr-21 12:20:44

shewalkslikerihanna

Actually they can
Have just rang to ask


Do you have any more information? Can you please tell us who you called?

SteveWebb Fri 30-Apr-21 14:57:08

Thanks to everyone for the kind comments on my post. I'll be logged in for the next hour and happy to respond to questions. Whilst you will almost certainly need to contact the Pension Service directly to get your own case looked into, I'm happy to help explain how things work - or didn't work. I look forward to your questions. Steve W.

SteveWebb Fri 30-Apr-21 15:00:13

EwwSprouts

Just asked my mum. I think she gets nothing.

@EwwSprouts We're aware of a group of women over pension age getting literally nothing but who would be entitled if they made a claim. For example, anyone 80 or over who satisfies a basic residence test can get £82.45 per week or more. Do let me have more details if it would be helpful.

SteveWebb Fri 30-Apr-21 15:01:59

WutheringBites

What happens to women who lost out in these situations and have since died? Is the money lost forever?

@WutheringBites DWP have said that if they find errors (that is, women who should have automatically got higher pensions and where DWP made a mistake) then they will make payments to estates if the person affected is no longer with us. But DWP may not have up-to-date contact details for next of kin etc., so may be worth writing in so they know who to contact.

SteveWebb Fri 30-Apr-21 15:04:31

MediocreOne

This happened to my mum. She had been underpaid £20,000, got it paid back last year.

@MediocreOne That's great to hear. When I started on all of this a year or so ago, I thought maybe tens of thousands of women had been underpaid. I was amazed when the DWP admitted recently that it could be more like 200,000 women over nearly three decades. And I strongly suspect that if they went back further they would fine more.

SteveWebb Fri 30-Apr-21 15:07:15

@PJ04JCW for women who divorced before pension age (and who didn't remarry), their pension at retirement should have taken account of the NI contributions of their ex husband. This only affected the amount of basic state pension and only covered the period up to the date of the divorce. If you have any reason to think this didn't happen for your late mother you could always write in, although as long as she mentioned her ex husband when she claimed her pension, I would expect they probably took account of this.

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