State pensioners urged to check if they are owed up to £9,000

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“Hundreds of thousands” of people receiving the state pension are thought to have been underpaid due to historical errors made by the UK Government. Underpayments could amount to a staggering “£1.46billion” collectively, a report by public spending watchdog, the National Audit Office, on the Department of Work and Pensions (DWP) has unveiled.

People most likely to have been affected by underpayments include those who reached state pension age before April 2016 – particularly if they didn’t have a full National Insurance record or full state pension entitlement.

According to insurance company Standard Life, the National Audit Office estimated last year that as many as “134,000” pensioners, mostly women, may not have received the full amount of state pension they’re entitled to, and could be owed an average of £8,900.

This amounts to total underpayments of over “£1billion”, however, estimates this year are even higher. Around “700,000” potential cases need to be reviewed by the Government and as many as “237,000” people could now potentially be affected.

Jenny Holt, managing director of customer savings and investments at Standard Life said this means: “Almost two percent of everyone receiving a state pension could be eligible for a top-up payment.”

Ms Holt continued: “These cases arise due to a variety of factors, including computer errors, information being incorrectly inputted in people’s records and the complexity of the state pension system and its design, which originated not long after the Second World War.”

While the average payout amounts to around £8,900, according to the Times, some women or their heirs have been handed as much as £100,000.

A correction exercise is currently being undertaken, in which a DWP spokesperson has said: “The action we are taking now will correct historical underpayments made by successive Governments. We are fully committed to addressing these errors, not identified under previous Governments, as quickly as possible.

“We have set up a dedicated team and devoted significant resources towards completing this – alongside publishing GOV.UK guidance for next of kin – with further resources being allocated throughout 2023 towards the underpayments exercise.”

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Who could be due a payment?

There are six groups who could have been affected by the underpayment issues, and these include:

Married women born before April 1953

Women receiving less than 60 percent of their husband’s basic state pension are likely to be receiving a smaller state pension than they are entitled to, meaning they could be due some back payments.

Women in this group are currently entitled to up to £85 a week, provided they reached state pension age before April 2016.

Widows who didn’t see a state pension increase when their partner died

Widows’ pensions can take account of their husband’s contributions, as well as inherit a proportion of any additional state pension he received.

If a widow did not receive an increase in their state pension when their partner died, they could be due an increase.

Widows who could have been underpaid while their partner was alive

Regardless of whether a widow receives the correct pension amount now, they may be due a back payment if they didn’t receive the correct amount when their partner was alive.

If a widow was receiving less than 60 percent of what their husband was receiving while he was on a full basic state pension, they may have been underpaid.

If the person’s husband reached state pension age on or after March 17, 2008, and their pension didn’t increase automatically, they could be due payment.

Divorced women

The pension rules that applied until 2016 outlined that those divorced when they reached state pension age could often qualify for a full state pension – particularly if the separation happened post-retirement.

So, women who are divorced on a reduced state pension, but whose ex-husband had a full National Insurance record at the time of the divorce, could be due a back payment.

Widowers and heirs

If a married woman dies before they receive their state pension, it could enable their widower or heir to be able to claim it instead.

People over 80 years old

People aged 80 or over who don’t receive at least £85 a week are entitled to a boost. Pensioners in this category are entitled to this regardless of their National Insurance record, however, they do have to satisfy a basic residency test.

How to claim

The fastest way people can check if they’ve been underpaid is to phone the Pension Service on 0800 731 0469. Full details can be found on the Government website.

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