The Government is looking into historic underpayments of the State Pension that could affect hundreds of thousands of Britons. This means many pensioners that received less than they should have done could now be able to claim back payments, which could be as high as £10,000 or more.
The underpayments were because of a mistake by the Department of Work and Pensions (DWP) that dates back to 1985. While most of the errors were made before the launch of the new State Pension in April 2016, Money Week revealed that more than £570 million worth of underpayments had been identified.
Furthermore, the article suggests that the back payments could total more than £3 billion.
With all this in mind, you might wonder whether you’re entitled to a payout. If so, read on to discover the five categories of pensioners that were affected by the scandal, and who may now be able to make a successful claim.
1. Married women born before April 1953
Under an old system, married women could claim up to 60% of their husband’s basic State Pension if it was higher than theirs. This system applied only to women born before April 1953.
If you were and you receive less than 60% of your husband’s state pension, you could be due a refund. If you fall into this category and your husband reached the age of 65 before 17 March 2008, you will need to apply to have your pension enhanced.
If your spouse reached the age of 65 after that date you should be automatically compensated.
2. Widows whose State Pension did not increase
You can inherit part of your late husband’s state pension, meaning your pension should rise after your spouse passed away. If you were born before April 1953 and your State Pension didn’t go up, you may be due a refund.
Similarly, if your pension is correct now but you received less than you were entitled to while your spouse was alive (i.e. 60% of his State Pension) you may have been underpaid. This again might mean that you’re entitled to a refund.
3. Divorced women born before April 1953
If your ex-husband’s National Insurance Contribution (NICs) record was fully paid up when you divorced, you should have received the equivalent of 60% of their State Pension. If you didn’t, you may have been underpaid and due a rebate.
After the introduction of the new State Pension in April 2016, divorcees can substitute their ex-husband’s national insurance record for their own. All that said, the amount of State Pension you receive will be based on the amount of NICs your ex-spouse had paid in at the point of legal separation.
4. Those aged 80 or above and didn’t receive £85 a week
You could also be eligible to a rebate if you’re a man or woman aged 80 or above, and your State Pension was below £85 a week. This is regardless of your NICs record.
You may also be able to claim a back payment if you’re a widower or heir of someone in this situation
5. Widowers or family members of someone affected by the mistake
You may also be able to claim a back payment if you’re a widower or heir of someone who received less State Pension than they should have done. If you believe that a family member who has died might be due a rebate, you probably want to make an enquiry.
You may need to take action to claim your rebate
Whether you receive an automatic back payment or not depends on which category or categories your claim falls under. You will have to contact the DWP if:
- you’re a woman who got divorced over pension age
- you’re the heir or widower of someone who may have been affected.
Please remember that it aims to repay those who are due money automatically. As you can imagine though, this takes time and relies on the government having the correct information.
Normally, it’s best to wait to see if the DWP contacts you about a pay out, although if you have not been contacted within a few months you probably need to get in touch with the Pension Service.
It can be contacted on 0800 731 0469 (Monday to Friday, 8am to 5pm) or at:
The Pension Service
Post Handling Site A
Wolverhampton
WV98 1AF
If you are the heir or next of kin of someone who you think may have been underpaid, click the link to make an enquiry.
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If you would like to discuss your pensions or financial retirement plan, please contact us as we’d be happy to help. As one of the UK’s largest financial advice companies, you’ll have peace of mind that your money’s in safe hands and that any advice we provide based on one thing alone: what’s best for you.
Friday 13 September 2024