Probe into state pension miscalculations finds female pensioner receiving as little as £1 a week.
Another group of women who may have been underpaid their state pensions has been discovered.
Former pensions minister Steve Webb, now a partner at consultancy LCP, says thousands of married women on effectively zero-rate basic state pensions were unaware that they could claim for more once their husband turned 65.
This uplift was automatic since March 2008 but had to be claimed for before that.
BBC Radio 5 Live reported on one case this week involving a 76-year-old retiree who was receiving just £1 a week.
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Carole Davies, 76, from Merstham in Surrey, retired in 2003 but didn’t qualify for the basic state pension as she hadn’t worked long enough to build up national insurance (NI) contributions, instead focusing on being a stay-at-home mum.
The low rate was because, under the old state pension system, there were three main elements – a ‘basic’ state pension, an earnings-related pension earned since 1978 and a much older ‘graduated retirement benefit’ (GRB) which ran from 1961-1975.
The women who qualify for this special concession were those with zero basic pension because of the rule that required a 25% NI record before any basic pension was due.
The average GRB was £1 per week, but many married women were unaware that they could claim for more once their husband reached state pension age. This had to be done manually up to March 2008 when it was made automatic.
Webb estimates that this could affect up to 5,000 married women and he has already helped secure repayments of more than £60,000.
He says: “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 backpayments.
“It is as if they are sitting on unclaimed winning lottery tickets. It is very important that women on these very small pensions make contact with the department for work and pensions [DWP] as soon as possible to see if they could be entitled to a windfall”.
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It comes after an investigation Webb and personal finance website This is Money last year found that many married women who reached state pension age before April 2016 were entitled to receive a rate based on their husband’s national insurance record.
Before March 2008, a retired wife on the lower state pension rate had to claim for an uplift worth 60% of her husband’s state pension.
This was then meant to be automatic but the research found many retirees missed out.
The government now faces a £3 billion bill to repay retired women for state pension underpayments, but the women on the GRB will not be automatically captured by DWP’s investigations so would have to contact the government’s pension service to make a claim.
The Office for Budget Responsibility (OBR), which assesses the government’s finances following the Budget, says it will cost around £3 billion over the next six years to address the shortfall for “certain married people, widows and over-80s.”
Speaking to MPs in January, pensions minister Guy Opperman blamed manual errors for the faults.
He told MPs: “There is a junior civil servant at the DWP who sometime 12 to 20 years ago failed to uprate a particular entitlement of a particular person.
“Not everybody, in fact we’re quite clear it’s definitely not the majority, but some individual claims have not been manually uprated by an individual working in a pension centre.
“We then have to find those individual cases and then we have to try and reassess them.”
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