State pension alert for women with husbands aged 80 and over

Several hundred thousand elderly women might be stuck on the wrong state pension for good because they aren’t covered by a vast Government correction scheme.

Some women with younger husbands are being handed large sums after a £1.5billion state pension underpayment scandal uncovered by This is Money and former Pensions Minister Steve Webb.

But those whose husbands reached state pension age before a crucial rule change on 17 March 2008 – and are therefore now aged 80 or over – are being urged to check if they are underpaid, and if so make proactive claims to to the Department for Work and Pensions.

This is because they won’t be contacted under its wider ongoing arrears scheme, although we have been flagging the need to do this since we exposed widespread underpayments in 2020.

Those women who come forward and are missing out will get a 12-month lump sum and correct state pension payments going forward, typically £85 a week – but not a full backpayment covering all lost years like other underpaid women.

Webb has discovered there are ‘low hundreds of thousands’ of older married women in this position, whom the DWP has no plans to contact, from an obscure Government document provided to an appeal tribunal.

A DWP spokesperson says: ‘Our priority is ensuring pensioners receive the financial support to which they are entitled and the action we are taking now will correct historical underpayments made by successive governments.

‘As upheld by a court last year, married women whose husbands reached state pension age after them, but before March 17 2008, are required by law to make a claim for an uplift to their state pension.’

The DWP issued an update on its wider corrections scheme last week which revealed just over 46,000 people have received payments worth a total of £300million so far, out of 237,000 who are estimated to be owed £1.46billion.

Webb says progress towards this target has been slow, and the DWP still has ‘a billion pound mountain to climb’ to identify underpayments and put them right.

Meanwhile, he sounded an alert to the many older married women who will not be contacted, and encouraged them to check if they might be missing out on state pension using a tool on his firm’s website here. 

You can contact the DWP about a state pension correction claim here.

Webb, who is now a partner at LCP and This is Money’s pensions columnist, says: ‘The group affected are married women who are currently getting less than the standard 60 per cent ‘married woman’s rate’ of basic state pension (£85 per week) but whose husband is now aged 80 or over (and therefore turned 65 before 17th March 2008 – 15 years ago).

‘For these women, a higher state pension may be available (the full £85 married woman’s rate, assuming the husband has a full basic pension of £141.85) but only if they claim it.

‘Because many such women are unaware of their entitlement, they continue to receive a reduced state pension.

‘And DWP argues that there is no “error” in these cases because the women concerned have simply failed to claim what they are entitled to.’

Webb and This is Money are still campaigning to get this ‘pre-2008’ group of married women full backpayments of their missing state pension, like those received by women with younger husbands. 

We have argued that women couldn’t be expected to know that they should make a second state pension claim to get a payment boost when their husbands reached state pension age. 

The DWP says men were given an extra claim form when they approached state pension age so that their wife could claim the top up where appropriate.

However, none of the many women affected whom we have spoken to in recent years, nor their husbands, recall receiving a second claim form at that point.

Webb, who is currently helping several women to make a complaint for ‘maladministration’, says: ‘Complaints have already gone in to DWP and several have been considered by DWP’s “Independent Case Examiner”. The first have now been submitted to the Parliamentary Ombudsman.’

The news that there are ‘low hundreds of thousands’ of older married women in this position emerged in an Upper Tribunal to which Webb submitted written evidence.

The case was brought by a woman who belatedly found out that she could have had a higher sum for many years if she had made a second state pension claim after her husband had retired too.

However, Webb says the judge ruled that the legal position was that a second claim was required in these cases, and that therefore the decision to limit backdating to 12 months was correct in law.

What did the DWP reveal at the tribunal? 

A disclosure by a staff member was submitted by the DWP in evidence to an appeal tribunal. The ‘LEAP’ exercise is the corrections scheme to give redress to underpaid women. 

Webb says: ‘It is shocking that the government knows that hundreds of thousands of older married women could be on a higher pension but has done nothing to make them aware in the 15 years or more since their husband retired.

‘I would encourage any married woman with a husband over 80 and who has a basic pension under £85 per week to check if she may be entitled to a higher pension.’

Regarding the progress of the correction exercise, Webb adds: ‘It is vital that the Department devotes extra resources to make sure that huge numbers of people are moved on to the correct rate of pension as a matter of urgency.

‘With the current cost of living crisis it is hard enough for older people to cope, without having to get by on a pension which is too low due to official error.’

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, agreed with Webb that there is a ‘mountain still to climb’ in dealing with state pension underpayments.

‘It is clear this is a situation that is not going to be resolved any time soon and in the meantime thousands of pensioners are getting less than what they are entitled to,’ she says.

‘The issue mainly affects women retiring under the old state pension system. Some were unaware of the problem but many who queried the issue with DWP over the years were told there was no issue with many enduring real financial hardship as a result.

‘These women have been let down on a gigantic scale and need resolution as soon s possible.’