Married women who retired before March 2008 were able to claim for an enhanced state pension once their husbands retired – but inadequate procedures and systems in place by the Department for Work and Pensions means tens of thousands of women were underpaid their state pension.
But, justice could be on the horizon after the Parliamentary Ombudsman’s office said this week it would fully investigate seven cases following a campaign run by the former pensions minister, Steve Webb.
Webb, who is now a partner at consulting firm LCP and was appointed as the Liberal Democrats pensions minister in 2010, described DWP systems prior to 2008 as ‘bizarre’ and ‘old-fashioned’. He has been seeking justice for the state pension underpayments for married women who already received smaller pension payments after taking time out of work to raise a family, for example.
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Prior to 2008, the DWP only gave the uplift to these women if they filled in another state pension form – the payment was not automatic. But, women would only get this claim form if their husbands had ticked the box to say ‘we will send you a form for your wife to fill in.’
For those who found out years later were told they could only get backdated payments of 12 months.
“I’ve been supporting a group of women on this issue for over three years, and the big breakthrough this week is that the ombudsman has written to the three lead cases I submitted to say that a full investigation is to be launched,” Webb said.
“Basically this means that the ombudsman thinks there’s something worth a serious look here.”
Here’s who was affected and what compensation could look like.
Who was affected by state pension underpayments ?
While there are several ongoing cases related to state pension underpayments, such as those relating to mothers and inaccuracies in National Insurance records, this case related to married women pensioners who hit state pension age before the rules changed.
“Prior to a rule change in March 2008, married women could claim a state pension at age 60 but were initially awarded a pension based purely on their own record of NI contributions. If they had spent time at home raising a family or had other interruptions to their work history, this pension could often be very low, potentially as low as 25% of the full basic pension.
“However, when their husband drew *his* state pension, married women could get an uplift to a 60% pension based on their husband’s contribution. Crucially, this uplift only happened if they made a further state pension application once their husband retired.”
These women will have missed out on tens of thousands of pounds and did not expect to apply again to get an uplift. For those who didn’t make the claim, they remain on the lower rate. Many have lost out on more than a decade’s worth of state pension payments.
“If compensation is recommended for all women affected, we could be talking about hundreds of millions of pounds,” Webb added.
