People need to check their pensions are correct says Steve Webb
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Divorced women are now being encouraged to ensure their state pension is correct. A 77-year-old woman had previously believed she was not entitled to a state pension and has now received a back payment of £60,000.
Yvonne Hooper told iNews.co.uk that she felt as if she had “won the lottery” after she made a claim to receive the money she was entitled to. She did not know she could get a pension through her ex-husband’s contributions, and was shocked at the amount she received.
The issue which impacted Mrs Hooper is one which could apply to many women who fall under the old state pension system, which is people who were born before 6 April 1953. Under the old rules, the basic state pension is usually based on an individual’s own National Insurance contributions record.
However, there is a different rule for divorced women. Those who are divorced can ask the Department for Work and Pensions (DWP) to substitute the National Insurance record of their ex-husband up to the date of the divorce when they reach pension age.
This could particularly benefit women who got divorced later in life, as they can use their ex-husband’s record for a longer period of time. This rule should be applied automatically when they make a claim, providing they indicate they are divorced on the state pension claim form.
However, if a woman never made a claim to begin with, perhaps because they believed they were not entitled to any state pension, they would not find this out. Women who did not claim when they reached state pension age, currently 66 in the UK for both men and women, can still claim right now and have their pension backdated to when they became a pensioner.
This rule also applies to women who were still married when they retired, but then divorce post-retirement. They can also request to have the NI record of their ex-husband substituted for theirs. The DWP is not notified of divorces unless it is done so by the parties involved, meaning women should let them know as soon as possible as it could impact their ability to claim state pension.
Mrs Hooper did not think she was entitled to a state pension, so did not make a claim until recently. She was widowed as a young woman and had been divorced twice by the time she reached her state pension age, which was 60 years old back in 2004. The Londoner has since remarried and currently resides in Spain.
She eventually decided to make a claim after speaking to a pensions consultant, and it paid off as she has received a full basic state pension, with back payments totalling more than £60,000.
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She said that when she retired in 2004, she was told she could not have a pension, but saw an article earlier this year which detailed how thousands of women had missed out on receiving a pension. This encouraged her to find out whether she was also missing out, but she could not have imagined how much money she was due.
As well as more than £60,000 in back pay, she will now receive a regular pension going forward, and she urged other women to make a claim to see if they are owed a pension. “I feel like I have won the lottery,” she said.
The National Audit Office recently criticised the DWP after they discovered more than 130,000 people had been impacted by decades of maladministration from the Department, which meant tens of thousands of people had been paid the wrong amount of state pension. This issue mainly affected women.
The people who were impacted by this are in the process of being tracked down by the DWP, who is seeking to pay back the amount of money they are owed as a result of the error. Those who lost out because of the DWP’s mistake could get £8,900 back on average, as well as receiving an increased pension going forward.
Further cases of women not being paid the correct amount of state pension have since been discovered, with their pensions not being topped up to the correct amount.
When the old state pension was in effect, it was common for women to stop working or work part-time after getting married, and those who did work were encouraged to pay reduced NI contributions, which meant they did not earn any state pension entitlement.
However, when these women’s husbands retired, they became eligible for a pension worth around 60 percent of the full state pension, based on their husband’s National Insurance record. But because some married women had in fact paid some full National Insurance contributions, usually before they got married, they were actually entitled to their own state pension once they reached the age of 60.
If that amount of pension was less than they would have received based on their husband’s NI contributions, it should have been topped up to the 60 percent rate. However, the extra amount of pension was not automatically paid if the woman’s husband was born before March 17, 1943, meaning women had to claim it themselves. It is believed tens of thousands of women never did this.
The extra state pension can still be claimed now, providing a claimant meets certain criteria. Specifically, married women who were born on May 16, 1948, or earlier, whose husband was born on May 16, 1943, or earlier and whose state pension is less than £82.45 a week are able to claim.
The DWP has said it will track down women who were born after May 16, 1948, or have a husband who was born after May 16, 1943 before the end of the year 2025 to rectify the issue, so people in that category do not need to claim. As Mrs Hooper demonstrates, women who were married but have since got divorced can also claim.
The DWP is also trying to find people over the age of 80 who receive a state pension of less than £82.45 a week. People who are in this situation will see their pension topped up to that amount, but the DWP will not be able to find people who get no state pension at all. They will need to make a claim by calling the Pension Service on 0800 731 0469.
A DWP spokesperson said: “We encourage people to contact us if they get divorced or their civil partnership is dissolved and every year we remind people about doing so alongside the uprating notifications we send out.
“We want everyone to claim the benefits to which they may be entitled and we urge anyone of State Pension age – or their family and friends – to check if they are missing out on financial support.”
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