Thousands of elderly women in the UK have been underpaid their state pension for many years, according to a new study.
Recently, research conducted by former UK minister for Pensions Sir Steve Webb revealed that “tens of thousands of women” have been missing out on state pension payments totalling around £100 million.
The report also stated that a large number of women may be entitled to both compensation and an increase in their pension income.
Some affected by the state pension scandal are still owed thousands of pounds but they cannot file a claim since claims for missing payments can only be backdated for 12 months.
Meanwhile, campaigners criticized the 12-month limit and called for its immediate removal to facilitate the victims of the scandal.
State Pension Scandal: Who Got Affected?
The pension shortfall mainly affects married women who retired before a new state pension system was introduced in April 2016. Many women who were beneficiaries of the older system missed out on pension raises that they were eligible for because of two main reasons:
- Some women did not realise that they could file a claim and apply for an increase in their pension income when their spouses turned 65
- UK government computers failed to automatically award the correct rate of pension to women who were eligible for a pension raise
While the pension shortfall disproportionally affects elderly married women, other groups may also be missing out on pension increases as well. These include:
- Widows who are receiving far less than the average expected rate for a widow claiming on her belated spouse’s record
- Divorced women who can substitute the NI records of their ex-husbands for the period up to the end of their marriage to receive a pension
- Women aged 80 or above who have passed a simple residency test and are, in principle, entitled to a non-contributory pension of £80.45
What Caused the Shortfall?
In 2016, the Department for Work and Pensions (DWP) overhauled the older state pension system and introduced major changes to it.
Under the old state pension system, only those married women who had paid at least 30 years’ worth of National Insurance contributions were eligible for full pension income.
This excluded a huge number of women who did not have the privilege of working for 30 years. These women were only entitled to low state pensions under the old system – but after their husbands reached the pensioner’s age of 65, they became eligible for higher pension income.
However, before 2008 women receiving low pensions were required to apply for the extra amount when their spouses turned 65. After such a claim was filed, it became the DWPs responsibility to pay the increased pension to the claimant.
Women who were entitled to pension raises could have missed out on the additional pension income in two ways:
Women whose husbands reached the pension age prior to 17 March 2008 had to file a claim to receive the extra income
Women whose husbands reached the pension age after 17 March 2008 should have been paid up to 60% of their spouse’s pension automatically – except many weren’t because of a computer glitch.
Whether or not you can file a claim now depends on which of the above scenarios you experienced:
the maximum claim you can make for backdated payments is for up to 12 months so, unfortunately, you won’t be able to recover your missed pension income in full
you can file a claim and recover the full amount you are due from the date you qualified. This can be a substantial amount of money, especially if you became eligible a long time ago.
Are You Being Underpaid State Pension?
If you are one of the 13,000 women who have been underpaid by state pension, you could be entitled to compensation.
You are not receiving your fair share of state pension if:
- You reached your state pension age before 6 April 2016 and you’re currently married
- Your spouse is older than the pension age and is being paid a full state pension
- Your weekly state pension is usually less than £80.45 and less than 60% of your husbands’ weekly pension
How to Make a Claim?
If you think you are being underpaid state pension, you can make a claim online by visiting the Pension Service website or calling them on 0800 731 7898.
A useful guide on Digital Money for Seniors?
There is also a guide that provides useful tips and advice to offer help to elderly relatives or friends when using smartphones and the internet.
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