A damning report by MPs has blasted the Department for Work and Pensions over the £1billion underpaid state pension scandal.
It levels the charge of a ‘shameful shambles’ at the DWP and said its complacency failed pensioners, with 134,000 women estimated to have missed state pension rises or payments when their husbands reached state pension age or died, or when they themselves reached the age of 80.
The report credits This is Money and its columnist, former pensions minister Steve Webb, for uncovering cases of women being underpaid in January 2020 and bringing the scandal to light.
We explain below how to find out if you could be affected and get paid the money you are due.
Ignored: Many wives may have missed out because the vital forms were sent to their husbands when it was time to claim (file image)
What is the underpaid state pensions scandal?
The scandal mostly affected women who should have had their pensions upgraded by the DWP without having to ask.
Those affected reached state pension age before April 2016. They include wives entitled to a pension worth 60 per cent of their husband’s basic rate, and also divorcees and widows who could claim as much as 100 per cent.
Others who missed out include pensioners who should have been paid the minimum 60 per cent of the basic state pension after they turned 80.
What are women owed?
The basic rate state pension pays £137.60 a week, so someone on a 60 per cent rate should receive around £82.45.
Wives are entitled to the 60 per cent rate from the day their husband reached state pension age.
But a rule change in March 2008 required the Department for Work and Pensions to pay the increased pension automatically.
Those wives who reached state pension age before then had to claim the extra income themselves.
Those who were unaware can upgrade their pensions, but cannot claim all of the money they missed out on.
Do I need to act?
The DWP says those whose husband became entitled to their pension on or after March 17, 2008, do not need to take any action and will be contacted.
However, following the shambolic handling of the affair so far – and the recent state pension delays affecting new pensioners – many women may want to try to find out if they should be owed money.
Steve Webb has created a tool to help women find out if they could be affected. To find out if you’ve been short-changed, go to lcp.uk.com/is-your-state-pension-being-underpaid.
If you believe you are missing out, you can call the Pension Service on 0800 731 0469 or write to: The Pension Service, Post Handling Site A, Wolverhampton, WV98 1AF.
DWP pays £17,000 to 73-year-old woman it failed to help six times
Since January 2020, This is Money has revealed a raft of cases where women were owned sums running into the tens of thousands of pounds. Many were only paid after we stepped in.
In the most recent case, revealed in December, a divorced elderly woman on a meagre state pension got nearly £17,000 from the Department for Work and Pensions after it repeatedly botched her payments.
Josephine Cameron, 73, was ignored or misinformed by staff who failed to spot she was on the wrong amount six separate times since 2015.
The former care home worker, who lives in Bedfordshire, contacted This is Money and Steve Webb to ask for help last month, after she was told her £85 per week pension was correct but thought the DWP was wrong.
After Steve asked the DWP to investigate, the error was discovered and Ms Cameron has now received arrears and an increase in her state pension to nearly £140 a week.
She says: ‘It’s awful. You have to be persistent. I kept thinking I am going to try again. I thought what have I got to lose.
‘It’s life changing. Over £50 a week extra to me is life changing. On the odd occasion I could afford to go out with friends, I had coffee. They would have cake. I didn’t have cake. I can buy cake now.
‘All my clothes come from charity shops. The only thing I buy new is underwear. I cut my own hair. This Christmas I can get my children something.’
‘This is a shameful shambles’: Women let down for decades in £1billion state pensions fiasco because of 30-year-old IT system – and many retirees are STILL at risk, MPs warn
ByBen Wilkinson Money Mail Deputy Editor For The Daily Mail
The handling of a £1 billion state pension underpayments scandal is a ‘shameful shambles’ and retirees are still at risk of being denied the money they deserve, MPs warn today.
A damning report criticises the Department for Work and Pensions (DWP) for complacency and inaction after failing more than 100,000 pensioners, most of them women, for decades.
The Commons public accounts committee also attacked the department for withholding information on the scale of the scandal and said the DWP had showed little interest in putting things right.
Some 134,000 pensioners were underpaid by as much as £128,000 due to systematic errors dating back more than 30 years.
Marilyn Lawson, 74, (pictured with partner John) received a pension of just a few pence a week for more than a decade. ‘I should have been told about my entitlement many years ago,’ she said
The blunders, which mostly affect widows, divorcees and wives relying on their husband’s pension, occurred after the DWP repeatedly missed opportunities to upgrade its computer system dating back to 1988, the MPs said.
Their report, published today, found the payments system was ‘not fit for purpose’, and the committee urged the department to find cost-effective ways to upgrade it ‘as a matter of urgency’.
I was given 58p a week for 10 YEARS
Marilyn Lawson, 74, received a pension of just a few pence a week for more than a decade.
She is one of 134,000 women who were not paid the rate they were entitled to due to a catalogue of errors at the DWP.
When Mrs Lawson, of Romsey, Hampshire, read about the scandal last year, she was collecting 58p a week.
But after querying her rate with the DWP, she found out she could get a pension worth £83 a week because of her husband John’s work record.
Yet the DWP initially refused to pay back the money the mother of two had missed out on, and it was only after former pensions minister Sir Steve Webb intervened that she received £40,000.
Mrs Lawson said: ‘I would still be receiving just a few pennies a week in pension if I had not seen this issue raised in the media.
‘While the lump sum is extremely welcome, I should have been told about my entitlement many years ago.’
But pensioners worried they are losing out are still being left in the dark because the DWP has not provided them with enough guidance or information, the MPs warned.
The report said: ‘These pensioners need clearer information to act, or risk missing out on significant sums.’
The DWP was also criticised for continuing to make errors and deciding to pay some pensioners interest on back payments, while denying it to others.
Labour’s Dame Meg Hillier, the committee chairman, said: ‘Departments that make errors through maladministration have a duty to put those it wronged back in the position they should have been, without the error.
‘In reality, DWP can never make up what people have actually lost, over decades, and in many cases it’s not even trying.’
She added: ‘There is no assurance that the errors that led to these underpayments in the first place will not be repeated in the correction exercise. This is a shameful shambles.’
The DWP is making a ninth attempt to fix the errors, with the exercise estimated to cost taxpayers more than £23 million, the report said.
MPs also said the DWP had no proper plan to track down and pay back money to relatives of short-changed pensioners who had since died.
Sir Steve Webb, the former pensions minister who exposed the scandal, said lessons had not been learned.
He said: ‘The committee is right to be highly critical of DWP over this whole debacle. There are still far too many people missing out on the state pension to which they are entitled and DWP needs to track them all down as a matter of urgency.’
The DWP said resolving the historical underpayments problem was a priority.
A spokesman said: ‘We have set up a dedicated team and devoted significant resources to processing outstanding cases, and have introduced new quality control processes and improved training to help ensure this does not happen again.’
- A rise in the state pension age could leave thousands struggling, as people’s healthy years where they are fit to work fail to keep pace with rising life expectancy, according to researchers.
- A study led by Keele University suggests older people who are expected to work beyond an age where they are healthy could end up having to rely on the benefits system if no state pension is available.