Female pensioners still being underpaid, warns ex-minister

WOMEN reaching state pension age this year are still being underpaid despite the Government spending £23m on staff to fix historic mistakes that left pensioners being owed more than £1bn.

Officials at the Department for Work and Pensions have been making fresh errors in state pension calculations and denying the blunders until challenged, a former pensions minister has warned.

In some cases retired women have been underpaid as much as £4,000 after being wrongly told they had zero entitlement to the state pension.

Former pensions minister Sir Steve Webb, now a partner at LCP, said despite a wide ranging correction exercise, fresh errors have continued to be made. He said: “I remain concerned that even the chastening experience of discovering a £1bn underpayment in state pensions does not seem to have prompted a fundamental change in the department’s approach to checking state pension awards.”

More than 500 staff have been recruited by the DWP to rectify the errors, at a cost of £24.3m to the taxpayer.

Estelle Henley, 66, from Southampton, said she was shocked when she was incorrectly told she was not eligible for any state pension just months before she was expecting the first payments.

Mrs Henley was told by officials that she did not have the required number of years of National Insurance contributions despite having paid the “reduced stamp” for years.

Until 1977, married women could opt to pay a reduced rate of National Insurance on their earnings and many of

‘Our priority is ensuring every pensioner receives all the financial support to which they are entitled’

those who did could still be paying a “small stamp” today. This means that they would be entitled to a reduced state pension of £85 a week for married women and £141.85 if they divorced or were widowed upon retirement, despite them not having made enough NI contributions to qualify for a pension in their own right.

After challenging the DWP, Mrs Henley was paid her arrears.

A spokesman for the DWP said: “Our priority is ensuring every pensioner receives all the financial support to which they are entitled.”

The DWP said it would issue a direct response to Sir Steve.