The Department for Work and Pensions (DWP) has estimated that more than 200,000 pensioners have had their pensions underpaid over at least the last 30 years.
A surplus of up to £2.8bn has been identified, the underpayment being due to “continuing process and control failings”. It has also been reported that most of the individuals who have been underpaid are women who should have received additional payments due to one or more of the following factors:
- Spouse or civil partner contributions
- They are widows / widowers
- Over 80 years old and are entitled to a higher basic rate
If you fit any of the above criteria and you reached state pension age before April 2016 you may wish to check your entitlement against your payments received.
The DWP have set up a new team of 320 staff to work through the information and locate the individuals who have been underpaid, at which point additional payments will be made.
However, 50,000 married women will miss out on some repayment simply due to the fact that they didn’t apply manually for a one-off uplift before 2008.
A spokesman for the DWP said: “Married women whose husbands reached state pension age after them, but before March 17 2008, are required by law to make a separate claim, and application forms were provided.”
In 2008 the process was made automatic, but many people were – and still are – unaware of the entitlement and do not believe they received an application form. It does seem unfair that this now manual process is not being made available to those who needed to apply for it pre-2008. The DWP have stated that it was not a legal requirement to notify these individuals of their entitlement.
Errors Going Back Decades
There are reports of individuals who have been positively identified as being affected by the underpayments, which go back at least 30 years. However some of these people have been informed by the Government that they may only claim for the most recent 12 months of missed payments, even if they have been underpaid for decades!
This is particularly unfair because the DWP has known about these errors since Feb 2020, and have announced that they will not pay any interest on the payments after Jan 2021 when their correction activities began.
How To Claim Missed Pension Payments
If you think your pension may have been under paid you need to contact the Pension Service online or by calling 0800 731 0469. You will need to have the following information to hand:
- Your name, date of birth and NI number
- Current annual basic state pension – you should be able to find this on your latest annual statement, but if not, give the total weekly or monthly amount
- Husband’s name, date of birth (and date of death if this applies) and NI number
- His current basic state pension, or last known before he died
In addition, there will be many who have sadly passed away not knowing they had missed out on payments they were entitled to. In this case the next of kin may receive the owed payments, they will need to contact the Pension Service – as above – with the person’s details. And just to generate a little more complexity, the pension payout may well affect inheritance tax. Any benefactors will need to contact HMRC to ensure any inheritance tax that arises from the surplus inheritance is paid.