Underpaid state pensions: A £3bn win for Steve Webb & This is Money

This is Money’s investigation into underpaid state pensions with Steve Webb has scored a £3bn victory: Check your payments, says SIMON LAMBERT

This is Money columnist Steve Webb says: ‘ ‘Repayments of £3billion over the next five years imply huge numbers of women have been shortchanged’

The cost of fixing underpaid women’s state pensions will be £3billion it has been revealed – and people wouldn’t be getting that money without the work of This is Money’s journalist Tanya Jefferies and columnist Steve Webb.

The £3billion figure slipped out among all the others packed into the Office for Budget Responsibility’s Budget report yesterday.

It highlights a colossal short-changing of state pensioners and I would urge our readers to check their pensions, if they are of an age to be affected, or encourage relatives or friends to look at theirs.

Over the past year, we have revealed case after case where people were owed back payments that in some instances ran into tens of thousands of pounds – and will get a better state pension from now on.

Former Pensions Minister Steve and Tanya work tirelessly on his weekly pension column and it was a reader question to this early last year that first flagged the issue.

A husband wrote in explaining that his wife had discovered she was only getting 39 per cent of his state pension when she should be getting 60 per cent, and had been told by the DWP that they could only backdate her payments by 12 months: he asked if this was right?

Steve explained that 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 reached retirement age.

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

Steve added: ‘Given that the onus was on the individual to claim an uplift prior to March 2008, this makes me think that there could be quite a few more married women in the same position as your wife.’

His suspicion turned out to be right and as Steve and Tanya widened their investigation they found lots more cases of women being underpaid state pension.

A few months later, we revealed that two other women who contacted us had received £9,000 and £5,000 in state pension payments they missed out on over years of being underpaid – and highlighted that many more retired women could be in line for payouts worth thousands.

As Steve and Tanya widened their investigation they found lots more cases of women being underpaid state pension 

Steve and Tanya pushed the DWP for answers as to how this had happened, whether the error was widespread, and what it was doing to help women underpaid state pension.

Those answers were not easy to come by – although we did uncover that a probe was taking place – and it is still not clear exactly how the blunders that led to this situation took place.

The current Pensions Minister Guy Opperman recently explained that many elderly women lost out on state pension because junior civil servants failed to manually update their individual records during past decades.

He told MPs it was a ‘significant legacy issue’, with hundreds of civil servants now working to sort it out.

Are YOU being underpaid state pension? 

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.

If you are a widow and think you have been underpaid, find out more here. 

Readers can contact Steve Webb at pensionquestions@thisismoney.co.uk. Please put DWP CLAIMS in the subject line and include your own and your husband’s date of birth (and death if you are a widow), how much you both receive in state pension and a contact telephone number.

But apologies in advance, we cannot reply to everyone and you should always prioritise contacting the DWP using the details above.

In some cases, underpayments have been astonishingly big. Last summer, we reported on a widow who got back £115,000.

There is also an indication that while all married women with lower state pensions could be affected, widows may be at particular risk of having suffered underpayments.

Of course, an issue like this doesn’t just stay with one publication. Steve has campaigned on it in his job at pension consultancy Lane, Clark & Peacock and the story has been covered and investigated throughout the financial press.

But when that £3billion figure emerged yesterday, it marked a real victory for This is Money’s journalism and for Steve and Tanya’s tenacity and hard work on a campaign to help people out.

The best bit about it though is the difference the huge sum will make once it is divided up: £3billion is a number so large it feels meaningless, the thousands of pounds in back payments and extra money in pension payments from now on for women affected won’t be.

Podcast special with Steve Webb on underpaid state pensions

Our pensions agony uncle Steve Webb and pension and investing editor Tanya Jefferies joined Simon Lambert and Georgie Frost on a This is Money podcast special last summer to explain the issue of underpaid state pensions.

They tell the stories of the women paid thousands less in state pension over the years than they should have been – and discuss their probe. 

Press play above or listen (and please subscribe if you like the podcast) at Apple Podcasts, Acast, Spotify and Audioboom or visit our This is Money Podcast page.    

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