DWP update as thousands of married women could get £10,000 pension payouts

Thousands of married women could be eligible for payouts of up to £10,000 due to a "sexist" pensions bureaucracy. The parliamentary ombudsman has initiated an investigation into concerns that these women were denied a higher state pension due to an "archaic" system that only informed their husbands about the entitlement.

Until 2008, older women whose husbands had retired could claim an increase in their state pension payments if they completed a claim form for the Department for Work and Pensions (DWP). However, many women missed out because they did not receive these forms as they were only dispatched if their husband ticked a box on their own state pension claims document.

Once the women became aware of their eligibility, their claims could only be backdated for 12 months. However, the ombudsman's investigation will assess whether the claims could be backdated for over a decade.

Sir Steve Webb, former pensions minister and Lib-Dem MP, now with consultancy LCP, estimates that "potentially over 100,000" women were affected, with some passing away before they could ever receive the correct pension. He stated that many of these women would have lost out on around £10,000 since their husband retired, although for others the sum will be "a lot more".

This figure assumes that the average woman affected missed out on approximately £1,000 per year and it took them ten years to realise they could have claimed. Sir Steve has hailed the start of the probe as " a major milestone in a long-running campaign for justice for thousands of married women". Speaking to the Telegraph, he said: "In my view, these women fell victim to a fundamentally sexist and archaic system which relied largely on married men ticking boxes and passing on claim forms to their wives.

"The women I have spoken to are all intelligent people who do not ignore official correspondence and who would clearly have claimed their uplifted pension if they had realised a second claim was needed once their husband retired. The fact that they did not know this was needed indicates a system which let them down and has cost them in many cases thousands of pounds through no fault of their own."

The Parliamentary and Health Service Ombudsman's investigation will initially focus on seven "lead cases", but its findings could potentially extend to all affected women. Before the rule change in March 2008, married women were eligible for state pensions at 60 based on their own National Insurance (NI) contributions record.

However, due to time taken off for child-rearing or other work interruptions, many women from this era ended up with significantly reduced pensions, sometimes only 25% of the full basic state pension. In the past, married women were entitled to a 60% increase in their state pension when their husbands began drawing theirs based on their contributions. However, this uplift only occurred if the woman made an additional state pension claim after her husband retired.

Many married women, having already applied for their state pension, assumed they would automatically receive the correct rate and were unaware of the need to apply again. If a second claim was not made, these women would continue to receive their lower pension indefinitely.

Importantly, many women only received any communication from the Department for Work and Pensions (DWP) about this requirement if their husbands ticked a box on their state pension pack. This would trigger two state pension claim forms to be sent to him, one of which he was supposed to pass on to his wife.