Carole and Stephen Graham: She received £8,600 after the Government blunder
Pressure is mounting on the Government to pay tens of thousands of elderly women a fortune in lost state pension following a scandal uncovered by This is Money.
The Labour Party and influential pension experts are demanding urgent action to address an estimated £100million shortfall in payments to women stretching back decades.
We reveal today nine more cases of older married women deprived of cash they were owed, including Carole Graham, pictured right with husband Stephen, who received £8,600.
These retired women are receiving payouts totting up to more than £38,000.
That is on top of a staggering £117,000 handed to a 96-year-old widow underpaid for 20 years, and around £36,000 given to a further eight married women in the past couple of months.
Hundreds of emails have poured in to This is Money from readers anxious to know if they have missed out on state pension too since we began our investigation.
Meanwhile, an online checking tool launched by ex-Pensions Minister Sir Steve Webb has received more than 65,000 visits and identified 3,000 women who seem to be getting too little state pension.
The Department for Work and Pensions has told us it is ‘checking for further cases’, but refused to reveal how the massive financial blunder happened, or what steps it is taking to identify women who may unwittingly be thousands of pounds out of pocket. Read the DWP’s full statement below.
We have received no indication from recent emails to This is Money that the DWP has begun actively contacting elderly women following internal discovery of a shortfall in their state pension, or started repaying any who aren’t already bombarding it with enquiries.
Why are some married women being underpaid state pension?
Married women who retired on small state pensions before April 2016 should get an uplift to 60 per cent of their husband’s payments once he reaches retirement age too.
Since 2008, the increases are supposed to be automatic, but before that women had to apply to get the full sum they were due.
Find out how to check if you are underpaid and what to do about it below.
Many DWP staff are occupied with coronavirus-related work at present, but the Government has not said if they will be redeployed to sort this out once the worst of the crisis has passed.
Webb initiated the investigation with This is Money after a reader question to his weekly pensions column about a 13-year underpayment.
He says he wants more than ‘vague assurances’ from the DWP when there is evidence of a fundamental problem.
Labour’s Shadow Pensions Minister, Jack Dromey MP, says: ‘It is nothing short of scandalous that the women who built Britain should be shortchanged on their pensions.
‘Ministers must carry out an inquiry into how this happened.
‘Crucially, the Government needs to put right this wrong as a matter of urgency.
‘Every one of the women affected deserves every last penny of what they worked so hard for throughout their lives.’
Michelle Cracknell, independent pensions consultant and former chief executive of The Pensions Advisory Service, says the DWP needs to proactively search its records to check the position for all women who might be underpaid, then contact them about the possibility they may be entitled to a higher pension.
She says that some women have now contacted the DWP themselves and received backdated payments, but adds: ‘What about the women who did not read or hear about the issue or are not confident enough to question the amount of their state pension?’
Cracknell goes on: ‘People expect that their state pension will be paid automatically and that the amount calculated by the DWP will be correct. This is not always the case.
What does the DWP say?
A DWP spokesperson says: ‘We are aware of a number of cases where individuals have been underpaid state pension.
‘We corrected our records and reimbursed those affected as soon as errors were identified. We are checking for further cases, and if any are found awards will also be reviewed and any arrears paid.’
It notes that married women are required to make a claim to have payments increased if their husband reached state pension age before 17 March 2008, but not if he did so after that.
The DWP says it encourages anyone who thinks they have failed to claim a state pension increase they are eligible for to contact the department.
It adds that ‘interest and consolatory payments’ will be considered on a case-by-case basis and depend on individual circumstances.
The DWP’s contact details are here.
‘You have to claim your state pension and the old state pension was so complicated with the interaction between husband and wives’ National Insurance records, it was easy for errors to occur.’
Regarding women whose husbands reached state pension age before March 2008 and needed to claim an increase, she says: ‘In this case, I would expect that very few women who had a low state pension would have ever thought that they had to apply for an uplift in their state pension when their husband or ex-husband turned age 65.’
Labour peer Baroness Jeannie Drake, who served on the Turner Pension Commission and on the boards of the Pension Protection Fund and The Pensions Advisory Service, also expressed concern for the women who are being underpaid and remain in the dark about it.
‘Many older women are still suffering under legacy rules of the state pension and this is another example of that.
‘I hope the DWP will now work to identify all the women who have been underpaid and ensure they get their money. I’ll be urging it to do so.’
Webb, who is now a partner at pension consultant Lane Clark & Peacock, says: ‘Every additional person who comes forward and receives backdated pension is further evidence of a fundamental problem.
‘We need more from the DWP than vague assurances that they are looking into the issue. We need transparency and energy to make sure that women who are missing out get their correct pensions as soon as possible.’
>>> Kay Denniss was underpaid £9,400 in state pension: Read her story below
Kay Denniss and husband Donald: Expat who lives in Portugal was underpaid for five years
Why are elderly women being underpaid state pension?
Around 130,000 married women could have lost up to £100million in state pension due to the Government error, according to an estimate by Steve Webb based on official figures.
Some of those who retired before April 6 2016 appear to have missed out on their right to an uplift to 60 per cent of their husband’s basic state pension once he reached retirement age too, but the Government has not explained how this happened.
In 2020/2021 the full basic state pension is £134.25, and 60 per cent of that is £80.55. Couples should check each of their annual state pension statements – look at the line on the statement listing just the basic state pension.
Since 17 March 2008, the increases are supposed to be automatic, but before that women had to apply to get what they were due.
Women in this group who discover they were underpaid only get a one-year backpayment and a higher state pension going forward.
Before March 2008, the Government was meant to write to the couples affected and ask them to apply for an increase.
But women who missed out tell This is Money that neither they not their husbands received such a letter, and insist they would have acted on it if they had done so.
Several women who have potentially lost many thousands of pounds in backpayments have appealed against this to the DWP, but so far unsuccessfully.
They plan to take their cases to the Parliamentary Ombudsman in the hope of getting full redress, and Webb has promised to support their efforts.
Meanwhile, Webb believes aside from married women, some widows and divorced women and those aged 80-plus are being underpaid too.
We recently highlighted the case of a 96-year-old widow with severe dementia who has received more than £117,000.
Some widows and widowers can claim up to a full basic state pension, currently £134.25 a week, but this depends on their ages and the strength of their late spouse’s National Insurance record.
Divorced women should also be benefiting from the ability to ‘substitute’ the National Insurance record of their ex-husband for the period up to the end of their marriage.
Meanwhile, women aged 80 and over should be entitled to an £80.45 pension, unrelated to their NI record, provided that they satisfy a simple residency test.
Webb says: ‘It is truly shocking that thousands of women are being short-changed on their state pensions. The system is highly complex and few will be aware of the special rules for married women, widows, divorced women and the over 80s.
‘Yet each of these groups seems to be losing out in different ways. Whilst DWP is willing to put things right on a case-by-case basis when individuals get in touch, there is clearly a systematic problem here.’
Has the DWP contacted YOU about underpaid state pension?
The Department for Work and Pensions has told us it is ‘checking for further cases’, but revealed nothing more about the extent of its probe.
If you have had notification about underpaid state pension and/or a backpayment without contacting the DWP yourself first, we would like to hear from you.
Write to Steve Webb at firstname.lastname@example.org and tell us the details. Please put DWP CLAIMS in the subject line.
IMPORTANT: If someone contacts you out of the blue by letter, phone or email claiming to be from the DWP, take precautionary steps before responding or giving away any personal details.
Go here to find the official contact details for the DWP, and use them to check and confirm if it was a legitimate approach.
If you think you have been underpaid state pension, Steve Webb’s firm LCP has launched an online tool to help older married women work out if they are being paid correctly. Find out more here.
But Webb stresses that the website is simply designed as a useful tool, and anyone with any doubt about the amount of pension they are receiving should contact the Department for Work and Pensions.
‘Appalled’ by DWP error that left £8,600 hole in pension
Carole Graham, 70, was receiving little more than £30 a week in basic state pension when her husband Stephen read on This is Money that this might be too low.
She will be handed £8,566.16 after we took up her case with the DWP, which has yet to decide whether she will also be given interest on her backpayment.
The retired hairdresser told us she would probably buy a new carpet with some of the money, adding: ‘There are lots of things I need to do in the house and didn’t do it because of money.’
Mr Graham, 68, a former project manger in the telecoms industry, reached state pension age just after the big shake-up in April 2016, which saw the introduction of a new flat rate. This is currently £175.20 a week if you qualify for the full amount.
The couple from Berkshire assumed that because he retired after the cut-off date, Mrs Graham wouldn’t qualify for an uplift to 60 per cent of his state pension.
Mr Graham says: ‘I am delighted that we have been able to do something about it but appalled about the way it was done, and how hard it was to get information about it and to get it corrected.’
Disabled former business owner to get £3,800
Diane Sears, who has been disabled since 1991, is getting a £3,672.96 backpayment plus £100.71 interest after her husband Raymond realised she was being underpaid.
Mr Sears, 75, has power of attorney for his wife, a former hairdressing business owner aged 73.
He said the money would be spent on new facilities for her, explaining: ‘We need our bathroom adapted for her disability. She needs a shower rather than a bath.’
The couple live in Suffolk, and Mr Sears, a former commercial lawyer, says of the DWP’s error: ‘I just don’t understand how it can be so widespread and they can get it so wrong for so many people.
‘All these people who are underpaid, they can do with every extra bit of pension they can get.’
Mr Sears adds that he has previously had to force the DWP to count the period after his wife’s illness as part of her employment, and give her a state pension which included that part of her record.
Sue and Raymond Duncalf: ‘It’s justice. We have worked all our lives’
Vindicated with £2,900 payout after two fruitless calls to DWP
Sue Duncalf, who says she was fobbed off twice by the DWP, is now receiving a £2,856.45 backpayment and £60.05 in interest.
Mrs Duncalf says she queried the amount she was receiving with staff several years ago, and again a few weeks ago after reading a story on This is Money, and both times was told it was correct.
She felt she couldn’t argue the first time, and says: ‘We gave up till we read your article and decided we can give it another go.’
Mrs Duncalf, who is 70, says a DWP staff member asked her if her husband was still alive, and then said her payment was correct.
The couple are retired shopowners from Flintshire, and Raymond Duncalf, 72, says: ‘It’s justice. We have worked all our lives. This is the only thing we have ever had.’
Expat overjoyed by huge payout
Kay Denniss, 77, has received a £9,258.64 backpayment and £133.75 in interest after being paid the wrong state pension for nearly five years.
She and her husband Donald, 70, were previously self employed house and garden maintenance staff, but have now retired to Portugal.
She told This is Money: ‘It’s wonderful. You can’t believe what it’s meant for us to get some money.’
Helen Kirkland and husband Christopher: Rang the DWP after being tipped off by a story on This is Money and got £4,700
‘I haven’t spent it yet – there are no shops open’
Helen Kirkland was getting a little over £40 a week in basic state pension, and rang the DWP after being tipped off by a story on This is Money that she should be on higher payments.
Mrs Kirkland, who lives in South Yorkshire with her husband Christopher, will receive £4,668.45 and interest of £39.59.
The 71-year-old used to manage a tea room in the Peak District, while Mr Kirkland, 67, was a self employed builder.
‘I am pleased. If I hadn’t read your piece I wouldn’t have known anything about it. I haven’t spent it yet – there are no shops open. I am sure we will find something,’ she says.
Mystery £6,700 payment to expat in Spain
Adrian West sent emails and a letter to the DWP about his wife Eileen’s state pension after reading on This is Money that some women were being underpaid.
The couple, who are both aged 73 and live in Spain, heard nothing for weeks until one day Mr West found the euro equivalent of £6,689 had appeared in their bank account.
Mrs West’s state pension was also increased without explanation.
After This is Money made enquiries with the DWP, it said a letter would be issued and Mrs West would also get interest of £153.23.
Mr West was a sergeant major in the armed forces and later worked for the prison service, while Mrs West was an administrator in the court service.
He says: ‘Hopefully more people will look at their pension statements and realise that they may well be not receiving the correct entitlement.’
Only one pension unfrozen when couple moved back to UK
Anne and Edward Hammond (not their real names) have discovered his state pension was increased correctly but hers was left frozen after they moved back to the UK from abroad two years ago.
State pensions are frozen if you decide to live in certain countries, such as Canada, India and Australia, but not in others, including EU countries and the US. Read more here.
The Hammonds, who are both aged 75, now live in south west England. Mrs Hammond was a travel agent and housewife and her husband was a senior manager at a luxury goods firm before they retired.
They contacted the DWP’s international pension centre after being tipped off by stories on This is Money that her £59 a week payments were too low.
The DWP initally told us Mrs Hammond’s payments were correct, but after we asked it to carry out a second check, it confirmed she would receive £2,350.68 and £18.28 interest.
‘I didn’t get any letter’: Former Wren feels shortchanged on her pension
Lal Weight, 79, will only receive a one-year backpayment because her 83-year-old husband John reached state pension age before March 2008.
STEVE WEBB ANSWERS YOUR PENSION QUESTIONS
The DWP has confirmed she is being underpaid, but issued a claim form to Mrs Weight to complete and return before it will tell her the size of her payment and her new weekly state pension.
Mrs Weight is a former Wren and was a stenographer for NATO in Malta before she married in 1963, while Mr Weight was a lieutenant commander in the Royal Navy, and the couple live in Devon.
She is certain they did not receive a letter asking her to apply for an uplift in her payments when her husband reached state pension age, and feels shortchanged on money to which she is entitled.
‘I didn’t get any letter. Definitely not. I wouldn’t have sat on it,’ she says.
I ‘got brush off’ when calling DWP
Angela Andrews says she called the DWP to query her state pension in 2001 and 2005 but got nowhere.
And because her husband William (not their real names) reached state pension age before March 2008, she is only in line for a one-year backpayment.
Mrs Andrews, a housewife aged 78, says she ‘got the brush-off’ from DWP staff.
She was not told she could get an uplift to 60 per cent of her husband’s payments after he reached state pension age too.
Mrs Andrews and her husband, a business owner also aged 78, who live in south east England, do not remember getting a letter about applying for an increase in her pension when he turned 65.
The DWP says Mrs Andrews ‘was underpaid state pension as she did not contact DWP to make a claim when this was due’.
It has issued a claim form for her to complete and return, and afterwards says it will uprate her payments and determine her arrears.