Martin Lewis discusses state pension underpayments
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State Pension payments are overseen by the Department for Work and Pensions (DWP) to ensure everyone receives the amount they are entitled to. However, in this vein, a recent investigation has found hundreds of thousands of women have not been receiving the correct amount they are due. A blunder by the Government has meant many married women have been living for years on a lower state pension than that which they are entitled to.
But the DWP will be taking action to right the wrong, and contact those who have been affected.
Pensions Minister, Guy Opperman, confirmed to MPs: “What we’re dealing with here is a junior civil servant at the DWP, who at some stage sometime 12 to 20 years ago failed to update a particular entitlement of a particular person.
“Not everybody, in fact, we’re clear it’s definitely not the majority, but some individual claims have not been manually uprated by an individual working in a pension centre.”
Under old state pension rules, married women were allowed to claim a basic state pension sum at 60 percent of the full rate.
This was based on the National Insurance contributions which were made by their husband.
This was only permitted, however, if the sum is bigger than the state pension a woman would have received based on their own National Insurance record.
The state pension uplift should have been automatically applied since March 17, 2008, but this is where the error comes into play.
In some circumstances, a number of women did not have their pension automatically increased due to a system error.
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Before this date, women were required to make a “second claim” to increase their state pension sum.
In these cases, married women should have received a letter directly from the DWP to inform them about their options, and whether they could stand to benefit.
But once again, some women have spoken out to inform the DWP they did not receive correspondence of this kind.
As a result, these groups of women have found they have potentially missed out on years of higher state pension payments.
Now, individuals who believe they may have been affected are being encouraged to take action on the matter.
Anyone who suspects they may have been receiving lower payments is advised to contact the Pensions Service to find out more.
This was a sentiment echoed by Sir Steve Webb, former pensions minister and partner at LCP, who encouraged women to be proactive.
He has previously touched upon the potentially “vast” issue as part of his work with LCP, and the consulting actuary firm estimates a final bill could rise to £100million for the DWP.
This, it says, is based on average lump sum repayments of just under £10,000.
The DWP is gradually working through its cases, but those who feel they may have been affected can act to see if they may be able to rectify the issue.
A DWP spokesperson previously told Express.co.uk: “We are aware of a number of cases where individuals have been underpaid state pension.
“We corrected our records and reimbursed those affected as soon as errors were identified. We are checking for further cases, and if any are found awards will also be reviewed and any arrears paid.”
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