Women on £1 a week pensions could be missing out on pension payouts equivalent to a lottery win, it has been revealed. Documents in The Budget revealed that pensions have been under paid for a decade. Approximately £3 billion is due in payouts between 200,000 pensioners.
Over 100 civil servants are currently contacting the woman affected by systematic failures. These will be awarded pension pay rises which have been underpaid since 1992. It could take up to five years. This payout is not automatic, women will need to claim it.
Steve Webb, Former pensions minister and partner at Lane Clark and Peacock LLP, was first to highlight the problem.
It is incredible that there are thousands of women getting such tiny pensions, but even more incredible that many could potentially be entitled to tens of thousands in back payments. It is as if they are sitting on unclaimed lottery tickets. It’s important that women on these very small pensions make contact with the DW as soon as possible to see if they could be entitled to a windfall.
Steve Webb.
Carol Davies was on just 40p a week, until she contacted the DWP
Retiring in 2003, Carol Davies received just 40p a week from her state pension. This was paid in one lump sum annually.
A stay at home mum, Mrs Davies had built up almost no entitlement to a state pension. She worked in an administrative role for a short period of time but had not built up enough National Insurance contributions. She has been underpaid for 15 years, unaware she was due a married womans pension.
They should have written to everyone and told them what they were entitled to, but nobody did, so we didn’t have a clue. It will make a huge difference to our lives. My husband is 80 and I am nearly 77. We should have had it earlier, it is disgraceful what they have done.
Despite her husband, Mr Davies, questioning them again when he retired in 2005, the DWP continued to underpay Mrs Davies. After watching a TV programme on pensions, Mrs Davies contacted the DWP. The grandmother of eight discovered that she should have been receiving £82.45 a week and is owed £61,000.
Changes in pensions through the years
The state pension was first set up after the Second World War, when men were the main income earners.
As women were not earning income, they could claim up a basic pension. This was proportion of their husbands state pension. In March 2008, women should have automatically received an increased payment. A technical error means, for thousands, this did not happen.
Over 1.3 million women of pension age are living in poverty, this equates to more than one in ten elderly people. Poverty charity Turn2US stated “This money is going to make such a meaningful and positive difference to the finances of women affected. It is vital that DWP does not let anyone slip through the net. They need the money as soon as possible.”
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