Thousands of pensioners urged to check if they're eligible for payout

Thousands of women owed an average of £13,500 each after being underpaid state pension are urged to check if they can claim payout amid warnings process to trace all those affected could take six years

  • Error suggested some people had been underpaid, according to OBR documents
  • Underpayment affected married women whose husbands reached pensionable age before 2008 and who were unknowingly entitled to an ‘enhanced pension’
  • DWP investigations uncovered systematic underpayment of state pensions
  • Married, divorced and widowed people may have been underpaid since 2008 

Women are being urged to check if they were underpaid the state pension and are in line for top-ups from a bill put at around £3 billion – after it emerged it could take up to six years for DwP to contact all those affected by the scandal. 

Around 200,000 women are set to receive letters revealing they are owed an average £13,500 windfall following state pension admin blunders dating back nearly 30 years.   

The underpayment affected married women whose husbands reached pensionable age before 2008 and who were unknowingly entitled to an ‘enhanced pension’ that would have boosted their payments by up to 60%.

Department for Work and Pensions (DWP) investigations between May and December last year found a systematic underpayment of state pensions, meaning tens of thousands of married, divorced and widowed people may have been underpaid since 2008.     

An initial forecast reflects estimates that it will cost around £3 billion over the six years to 2025-26 to address these underpayments, but warned that the costing ‘is subject to a high degree of uncertainty as the true extent of the underpayment is not yet established’. 

A dedicated team of 155 civil servants is working through hundreds of thousands of files to trace every woman affected to repay them. 

Former pensions minister Sir Steve Webb, who is now a partner at consultants LCP (Lane Clark & Peacock), said the scale of the scandal was ‘truly mind-numbing’. 

Mother-of-two Lynda Hallaway, from Ellerby, was receiving just £57 a week — despite her husband John, 73, reaching pension age in 2012.  

Mrs Hallaway, 74, has now seen her pension hiked to £80.45 and had a back payment of £9,160 – but says: ‘I would encourage anyone who thinks her pension is being underpaid to get it checked.’   

Lynda Hallaway, 74, had been receiving only £57 a week,  despite her husband John, 73, reaching pension age in 2012. She now gets £80.45 and she has had a back payment of £9,160

Lesley Pugh, 76, estimated she missed out on more than £20,000 because she did not know she could claim a pension based on her husband Tony’s record of National Insurance contributions.  

Woman, 96, is deprived of £117k over 20 years 

Rosemary Chattell’s family say they had queried her £77-a-week pension before

A 96-year-old widow has received more than £117,000 after it emerged she was not paid enough state pension for 20 years.

Rosemary Chattell’s family say they had queried her £77-a-week pension before, only to be repeatedly told by DWP officials that she was getting the correct amount.

Rosemary lives in a care home in Cheshire and suffers from dementia. Her son John, 66, who has power of attorney for her, queried his mother’s pension, but says he was fobbed off three times by the DWP. 

John, a retired sales manager, says it was only on the fourth call that someone agreed to investigate for him. 

They later called back to say his mother was owed £107,852.58. 

After sending two letters to the DWP requesting interest on top, he turned to This is Money for help. Following its intervention, the DWP also later added interest of £9,447.20.

Rosemary’s pension should have been increased automatically after her husband Roy died at the age of 76. 

John says: ‘It’s an injustice. How many other people are there like us? There’s got to be thousands. Without making a call, you never find out.’

A DWP spokesman says: ‘We are very sorry that Mrs Chattell’s state pension review was not processed correctly. We have amended this, paid the arrears owed with interest and apologise unreservedly.’

The grandmother-of-two first collected a small state pension in 2006 before Tony, 78, was able to claim his in April 2007.

The couple, who have been married for 56 years and live near Folkestone, Kent, say they were never aware of the entitlement and do not remember seeing the claim forms. 

Lesley said: ‘I got a pathetic amount of pension. It really riles me. It’s appalling. Obviously, if I had had a claim form like that, I would have acted on it.’

Lesley only realised she had been missing out when she heard former pensions minister Sir Steve talking about it on the radio in May. It then took six calls over two months to get her pension hiked from £41.46 to £85.32 a week.

Yet, while she missed out on a better pension for 13 years, the DWP could only backdate her claim a year, leaving her with £2,481.36.

Her husband Tony said: ‘It’s a victimisation against wives who raised their families and had no opportunity to go to work.’

Lesley says she escalated her complaint to the ombudsman because the DWP needs to make sure no other women miss out.

She says: ‘A lot of people of my age won’t be in a mental or physical state to do this and have the time and effort to get their complaint in. I do think the DWP are relying on time here, and hoping that we will all become so frail and out of energy that we won’t be able to do it.’

And she urged other women to fight back, adding: ‘I say: go for it. Do not get fobbed off. They aren’t going to do it for you.’ 

Sir Steve, who is now a partner at pensions consultants LCP (Lane Clark & Peacock), said the scale of the scandal was ‘truly mind-numbing’.

He added: ‘When I first looked into this a year ago I had no idea it would explode into such a huge issue. It is truly shocking 200,000 women have been underpaid such huge sums.’ The first letters went out in January, and the DWP says it will contact all the women owed money.  

A report from the Office for Budget Responsibility revealed the DWP would have to put aside £3billion over the next six years. It is understood around 200,000 women are owed £2.7billion in all – an average of £13,500 each. 

The report warned that the costing ‘is subject to a high degree of uncertainty as the true extent of the underpayment is not yet established’.

Around 200,000 women will receive letters to say they are owed an average £13,500 windfall due to state pension admin blunders dating back nearly 30 years. Budget documents yesterday revealed that the scandal will cost the Department for Work and Pensions (file image) an estimated £3billion to rectify

The underpayment affected married women whose husbands reached pensionable age before 2008 and who were unknowingly entitled to an ‘enhanced pension’ that would have boosted their payments by up to 60%.

Are you being underpaid state pension? How to check 

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. Its details are here.

Department for Work and Pensions (DWP) investigations between May and December 2020 uncovered a systematic underpayment of state pensions, meaning tens of thousands of married, divorced and widowed people may have been underpaid since 2008.

A repayment programme started in January 2021.

Women who retired under the old state pension system before April 6, 2016, are entitled to claim a rate equivalent to 60 per cent of their husband’s basic state pension. The DWP was supposed to pay this automatically from March 2008.

Widows are also entitled to the same state pension their late husband received, and the over-80s should all be receiving at least a 60 per cent state pension.

The current basic state pension pay is £134.25 a week, so married women should be receiving at least £80.45 every week.  

But arrears will not have any interest added. Sir Steve, now a partner at pensions consultancy Lane Clark & Peacock, said the scale of the scandal was ‘truly mind-numbing’.

He said: ‘When I first looked into this a year ago I had no idea it would explode into such a huge issue. It is truly shocking 200,000 women have been underpaid such huge sums.’ 

The first letters went out in January, and the DWP says it will contact all the women owed money.   

Make your voice heard 

If you only receive a one-year backpayment from the DWP, here’s how to fight for the full sum. 

Step 1. Make a formal complaint of maladministration to the Department for Work and Pensions (DWP). Explain how you missed out because the DWP did not run the system properly. Was your claim form sent to your husband for example, or should Government records have shown you were due the higher rate?

Or it may be you had no reason to suspect the Government would not pay you the top rate available, or that the law change in March 2008 showed the DWP knew some women were missing out. 

Send your complaint to the pensions minister at: Guy Opperman MP, DWP, Caxton House, Tothill Street, London SW1H 9NA

Step 2. If the DWP rejects your complaint, you can then escalate it to the Parliamentary and Health Service Ombudsman.

To do this, visit ombudsman.org.uk/ making-complaint or call 0345 015 4033.

You will also need ask your MP to refer your complaint to the ombudsman. 

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