Five groups of state pensioners identified as being owed 'thousands' from DWP

Five groups of women may be owed THOUSANDS in their State Pension from the Department for Work and Pensions (DWP). While many individuals are planning their own retirement funds, the state pension remains an essential lifeline for covering basic needs.

The current state pension stands at £221.20 weekly, totalling £11,502.40 annually, and is expected to increase to just shy of £12,000 come April next year. According to the Pensions and Lifetime Savings Association (PLSA), a single person requires £14,400 annually for a "basic" retirement lifestyle.

With this benchmark, the full state pension covers 80 percent of the necessary funds but falls short of the total. The State Pension remains a crucial part of the financial planning for an increasing number of ageing Brits.

READ MORE UK set to be hammered by 5cm of snow with two parts of England 'bearing brunt'

To qualify for the full state pension, you need 35 qualifying years on your National Insurance record and at least ten to receive any amount. But a series of mistakes means multiple groups of women have been underpaid their state pensions...

Married women

The biggest scandal involves married, divorced or widowed women who reached state pension age before April 2016. These women should have received up to 60% of their husband’s basic state pension entitlement, but errors made by the DWP meant this didn’t happen.

“Rules around pension entitlements can be complicated,” says Steve Baker, Chartered Financial Planner at Ascot Lloyd. “The government brought in a new state pension system on 6 April 2016 because the previous system was seen as overly complicated, but that complexity still lives on to the extent that even DWP continues to make errors.

“If your partner reached state pension age before 6 April 2016 and has subsequently passed away then your state pension should have automatically increased to at least what your partner was being paid.

“For example, Mrs A, a client of mine, was sadly widowed in December 2023. From January 2024 her state pension immediately increased from the £465 every four weeks she was receiving to £1,315 which was her husband’s state pension.

“If your circumstances are similar but your state pension didn’t increase after your partner died you should speak to your financial adviser, or contact the Pension Service yourself, to check if you are entitled to the increased payments.”

Widowed women

Some widows did not see their state pension increase when their husband died, based on his contributions. You may also be able to inherit up to 100% of his additional state pension, also known as SERPS. If you are due money back, this will be backdated to when your husband died.

Sir Steve Webb, who was pensions minister between 2010 and 2015 and is now a partner at consultancy firm LCP, has called on DWP to launch an “urgent investigation” into the scale of the problem.

“Having had to spend years checking hundreds of thousands of historic state pension calculations for errors, you would hope that DWP would be making sure that new claims are handled correctly. But we have found worrying evidence that this is not the case,” Webb said.

“There seems to be a particular problem for people who are widows or widowers when they claim their state pension. In some cases DWP seems to have failed to automatically add any inherited state pension they were due from a late partner. These cases may well be the tip of an iceberg, with many thousands of people potentially underpaid.”

Divorced women

Divorced women may also have been underpaid. This is because a change in the rules means you can substitute your National Insurance record of your ex-husband for your own, up to the date of your divorce. Former pensions minister Steve Webb has raised the alarm that another segment of people, mostly women whose husband or civil partner passed away, are not being paid the state pension which is due to them.

If you are widowed and don’t, or won’t, receive the full basic state pension based on your own National Insurance contribution record, and your deceased spouse or civil partner reached state pension age before 6 April 2016, you may be entitled to inherit some of their state pension.

If you are eligible, DWP should apply this additional state pension to your payments automatically, however it appears this has not been the case for some people. Please note, if you remarry or enter a new civil partnership before you reach state pension age you lose the right to inherit any State Pension from your former spouse or civil partner who passed away.

Over-80s

If you're aged over 80 and get a state pension of less than £85 a week, regardless of whether you're married, widowed, divorced or single, you may also have been underpaid. These people should have automatically been entitled to a "category D" state pension when they turned 80.

DWP is in the midst of a correction exercise to resolve historic pension errors. As of 31 March 2024, over £280 million had been paid in arrears to approximately 23,000 widows and widowers, and DWP estimates a total of £650 million will have been paid to more than 50,000 widows and widowers who wrongly missed out on inherited state pension by the end of 2024.

Women who took time off work

Women who took time out of work to look after children and claimed Child Benefit between 1978 and 2000 may also have been short-changed their state pension.