State Pension correction – does this affect you?

Last year it was identified that, due to an administrative error, tens of thousands of married, divorced and widowed women may have been underpaid their State Pension since 2008.

The Government has confirmed this month that they are committed to ensuring that those people who have been underpaid receive the money they are entitled to. This process remains ongoing.

Guy Opperman MP, the Parliamentary Under-Secretary of State at the Department for Work and Pensions (DWP) stated:

We became aware of issues with State Pension underpayments in 2020 and we took immediate action to investigate the extent of the problem… Rectifying these cases is a priority for the department and we will do it as quickly as possible.

From August 2020 to January 2021 the department carried out a number of complex scans of legacy computer systems that analysed many millions of State Pension records. The scans identified cases requiring further investigation.

Who is affected?

Categories of people who may be affected include:

  • Those married or in a civil partnership who reached state pension age before 6 April 2016 and may be entitled to a Category BL uplift based upon their partner’s National Insurance contributions.
  • People who have been widowed and their State Pension was not uplifted to include amounts they are entitled to inherit from their late husband, wife or civil partner.
  • People who have not been paid Category D State Pension uplift as they should have been from age 80.

Where underpayments are identified, the DWP, who have responsibility for the State Pension, will contact the person to inform them of the changes to their State Pension and of any arrears payment they will receive. The DWP estimate that the cost of repaying these arrears is £2.7 billion.

More information can be found on the Gov.UK website.

If you would like further advice on your pension or retirement planning, get in touch with a member of our team on 01903 534587.