According to a recent article in Which?, tens of thousands of women have lost money after being underpaid their State Pension by the government. Now, the Department for Work and Pensions (DWP) is looking to pay around £3 billion in compensation to women after underpaying them for years.
The situation has arisen because before March 2008, married, divorced or widowed women would need to claim their “married women’s rate” State Pension. Typically, it would provide an uplift of 60% of their husband’s or ex-husband’s basic state pension.
The problem has been that after this date the DWP’s computer system should have provided the uplift automatically, yet it didn’t, leaving many women receiving less State Pension than they should have.
However, the DWP has also said another group of women who could also be due compensation are those whose husbands reached the age of 65 before March 2008. According to Which?, the DWP claims it wrote to women who fall into this category to advise them of the situation, yet if your husband reached 65 before the date, it’s probably worth contacting the DWP to confirm your situation.
Read on to discover if you may be one of the thousands of women due compensation?
If you are married or divorced you might be due compensation
The DWP have identified married and divorced women as being two groups who may be due compensation. If you fall into any of the following categories, you could claim money from the government:
- Married women whose husband turned 65 before 17 March 2008 but never claimed the “married women’s rate” uplift of up to 60%. As the basic State Pension is £137.60 a week in the 2021/22 tax year, this uplift would be worth an additional £82.56 a week.
- Women above the age of 80 who are receiving a basic State Pension of less than £80.45.
- Divorced woman, especially those who divorced post-retirement. If you have reached your State Pension Age, you may be able to claim a state pension based on your ex-husband’s National Insurance contributions (NICs) record up to the date you divorced.
If you’re a widow, you might also be able to claim compensation from the government
The DWP has also confirmed that some widows will also be due compensation after being underpaid their state pension.
For example, if your husband has died but your pension was not increased after their passing, you could receive a back payment from the DWP. This is because you have the right to inherit your husband’s basic State Pension depending on his NICs and could also receive at least 50% of any additional State Pension he was receiving.
If you are a widow and feel your State Pension was underpaid when your husband was alive, you could be able to make a claim. This is particularly pertinent if your husband turned 65 after 17 March 2008, as this is when your “married woman’s rate” uplift should have happened automatically.
A financial planner can help you understand your situation
Rules and regulations around pensions and the State Pension can be complicated. As a professional holistic financial planner, I can help you understand your situation and whether you may be due compensation from the government.
In addition to this, I can also help ensure your pensions are working as effectively as possible to provide you with the lifestyle you want in retirement.
As a practice that specialises in helping independent women with their wealth, I can help you create the lifestyle you want and the confidence to make decisions that could enhance your standard of living.
By helping you create financial strategies that work for you, your wealth could be used to generate a more comfortable and enjoyable life, allowing you to achieve all that you want from life.
As a widow, divorcee or a pensioner, dealing with your wealth can seem daunting, which is why I provide an empathetic service that aims to ensure the best outcomes for you at all times.
Get in touch
If you have any questions about your State Pension, any uplift you feel you should have received but didn’t, or your general wealth, please call us on 0116 262 1414.
From building an emergency fund, to achieving your financial goals or protecting your loved ones, we at Finance Lab can provide you with peace of mind about you and your family’s future.
Click here if you like to visit the government’s pension service directly to find out more.
This article is for information only. Please do not act based on anything you might read in this article until you have sought professional advice.