Government to correct state pension underpayments (Sep 2021)

The Government has announced that it is to distribute £1bn to 134,000 people after underpaying their state pension over the course of several decades with 90% of those affected being women.

The government has announced that out of 134,000 cases, about 94,000 are still alive and some 40,000 have died and payments could be made to estates.  The biggest error so far identified was an underpayment of £128,000 and the errors detected  by the National Audit Office (NAO) report go back as far as 1985. The DWP currently has 1.4 million such cases on it’s database.

Majority of the errors detected refer to married and divorced women as well as those over 80 who were entitled to uplifts in their state pension. Some women retiring under the basic state pension system were entitled to an automatic uplift in their state pension when their husbands reached age 65. But in many cases, this did not happen, and women had to actively claim it before the uplift was applied.  Other women have missed out on state pension uplifts because they did not tell DWP about their divorce.

A combination of manual error and a complex system means thousands of women have missed out on payments that could have made a real difference to their standard of living in retirement.

The DWP is now prioritising individuals who fall into "at risk" categories, such as those who are widowed or aged over 80.

However, as mentioned before, divorced women - especially those who divorced after pension age and post-retirement divorcees can have their pension reassessed and benefit in full from their ex-husband's National Insurance record, but they must telephone DWP to notify them of the divorce.

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Page last updated: 4th October 2021 3:28 PM

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