State PensionApr 22 2021

Thousands of women face 2-year wait for pension payouts

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Thousands of women face 2-year wait for pension payouts

Thousands of women face a wait of up to two and a half years to receive a state pension payout after being underpaid by the government.

In a written statement, published yesterday (April 21), pensions minister Guy Opperman admitted that the government was aiming to pay back everyone who had been underpaid by “the end of 2023”.

The Department for Work and Pensions has identified underpayments relating to entitlements for certain married people, widows and the over-80s dating back to 1992.

To pay them back quickly, it is looking to more than triple the number of staff it has working on this issue, from 150 to 510.

Opperman said: “The department already has a dedicated team of over 150 people working on the correction activity. 

“Throughout 2021/22 we intend to increase significantly the capacity of the team with the recruitment of an additional 360 staff.”

The issue of state pension underpayments was first raised by pension consultants LCP back in May.

Under the old system, married women could claim a basic state pension at 60 per cent of the full rate based on their husband's contributions, assuming this would be a greater amount than the pension they would receive from their own contributions.

Since March 17, 2008, this uplift should have been applied automatically. Prior to this date, a married woman had to make a “second claim" to have her state pension increased when her husband turned 65 - and many women did not make such claims.

Steve Webb, partner at LCP, said the government's recruitment effort showed the “huge scale” of the problem.

Webb said: “Hundreds of thousands of women have been underpaid, in some cases for decades, and they have a right to expect swift resolution. Many of those who have been underpaid are relatively elderly and time is of the essence.  

“Now that this problem has been revealed, everything possible must be done to rectify the errors and pay arrears as soon as possible.”

The DWP previously promised to search its records to unearth information on those who continue to miss out, and several thousand married women have already phoned DWP and made successful proactive claims.

Last month (March 3), the DWP estimated it will cost £3bn over the next six years to address the issue.

But in his written statement, Opperman said the numbers were subject to change.

He said: “It is important to note that estimates on the numbers affected, and costs, are currently based on highly complex scans of the computer system, analysis of DWP administrative data and very small samples of cases randomly selected and reviewed. 

“They are highly uncertain and will be further refined by our analysts as the correction activity progresses and we are able to base estimates on management information gathered from cases actually reviewed and corrected.”

A DWP spokesperson said: “The action we are taking now will correct the historical underpayments that have been made by successive governments and anyone impacted will be contacted by us to ensure they receive all that they are owed.”

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