Government spurns calls for full probe into underpaid state pension

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State pension scandal: Labour ramped up the pressure on the Government in parliament over underpayments going back decades


Government spurns calls for full proactive effort to make payouts to women losing out out on thousands of pounds in state pension

The Government resisted pressure to actively track down elderly women underpaid thousands of pounds in state pension when fielding questions in parliament today.

Labour urged Pensions Minister Guy Opperman to launch a full investigation into the scandal, uncovered by This is Money and our columnist Steve Webb, to find and pay women affected by the error what they are due.

Opperman said the Department for Work and Pensions are looking into the matter, and invited women who believe they are affected to contact the Pension service helpline or Pension Wise.

State pension scandal: Labour ramped up the pressure on the Government in parliament over underpayments going back decades

Webb, a former Pensions Minister who is now a partner at LCP, condemned this response as ‘woefully inadequate’.

Tens of thousands of elderly women could be owed an estimated £100million in lost state pension after a blunder stretching back decades. 

Shadow Pensions Minister Jack Dromey told the House of Commons: ‘Case after case has been uncovered of retired women underpaid on their pension. 

‘Many don’t know yet to this day. Some have tragically died before learning of the department’s mistake.

‘When will the department work out how many women have been affected, who they are and bring forward a plan to contact them.’

Jack Dromey: 'Case after case has been uncovered of retired women underpaid on their pension'

Jack Dromey: ‘Case after case has been uncovered of retired women underpaid on their pension’

He said a proper investigation was required, so that the older women who built Britain get the justice they deserve in retirement.’

Labour MP Nick Smith said: ‘Informed commentators say that over a hundred thousand women are going to be impacted by this error. 

‘Many of them will be old women more likely to be living in poverty.’

Smith also asked the Government to review backdating rules to ensure women are treated fairly.

Some women have received full payouts, while others whose husbands reached state pension age before March 2008 are only getting a one-year backpayment and increased sums going forward – see the box below.

Opperman said in parliament today:  ‘We invite anyone who thinks they have failed to claim a state pension increase they are eligible for to contact the department whether through the pension service helpline or alternatively Pension Wise can assist.’

Labour has ramped up the pressure on the Government by putting down a series of written questions, including asking whether it will pay any sums owed to the heirs of women who have died while receiving incorrect state pension.

This is something This is Money has asked repeatedly, but the DWP has refused to respond.

Labour has also asked what the tax liability will be for women who receive back payments of underpaid state pension in a single financial year.

Why are some married women being underpaid state pension? 

 Married women who retired on small state pensions before April 2016 should get an uplift to 60 per cent of their husband’s payments once he reaches retirement age too.

Since March 17 2008, the increases are supposed to be automatic, but before that women had to apply to get the full sum they were due. 

We recently asked tax experts for their view on whether women affected will avoid paying unnecessarily high amounts of tax.

The Government’s tax arm has told us: ‘HMRC is working with the DWP to determine any tax implications of these payments as soon as possible.’ 

Webb said: ‘With more and more women coming forward to report underpaid state pensions, there is no doubt that there is a systematic problem here.

‘It is not good enough for the DWP to ask people to come forward one by one. The government has had long enough to review this issue – it is time for action.

‘DWP must use its own records to track down the women who are missing out as a matter of urgency. 

‘The current response to this issue is woefully inadequate.’

In a previous statement by the DWP , a spokesperson said: ‘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.’

It notes that married women are required to make a claim to have payments increased if their husband reached state pension age before 17 March 2008, but not if he did so after that.

The DWP says it encourages anyone who thinks they have failed to claim a state pension increase they are eligible for to contact the department.

It adds that ‘interest and consolatory payments’ will be considered on a case-by-case basis and depend on individual circumstances.

Has the DWP contacted YOU about underpaid state pension? 

The Department for Work and Pensions has told us it is ‘checking for further cases’, but revealed nothing more about the extent of its probe.

If you have had notification about underpaid state pension and/or a backpayment without contacting the DWP yourself first, we would like to hear from you.

Write to Steve Webb at [email protected] and tell us the details. Please put DWP CLAIMS in the subject line.

IMPORTANT: If someone contacts you out of the blue by letter, phone or email claiming to be from the DWP, take precautionary steps before responding or giving away any personal details.

Go here to find the official contact details for the DWP, and use them to check and confirm if it was a legitimate approach. 

If you think you have been underpaid state pension, Steve Webb’s firm LCP has launched an online tool to help older married women work out if they are being paid correctly. Find out more here. 

But Webb stresses that the website is simply designed as a useful tool, and anyone with any doubt about the amount of pension they are receiving should contact the Department for Work and Pensions.

 

TOP SIPPS FOR DIY PENSION INVESTORS

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