200,000 women are up for an automatic average payout of £ 13,500 due to an error in the state pension
DWP automatic payouts apply to women whose husbands turned 65 on or after March 17, 2008
When the state pension was first established after World War II, because men were usually the main breadwinners and women did not work as many years, married women received part of their husbands state pension. This remained the case until April 6, 2016 when it was changed.
Those who reached the statutory retirement age before that date were entitled to an increased pension amount if their state basic pension was less than 60% of their husband’s basic state pension. In this scenario, women received a boost of up to 60%. The same applies to widows who may have been underpaid during their husband’s lifetime.
If you are one of these women, your pension should automatically have been topped up to 60% of your husband’s amount. However, some women failed to do so due to a failure of the DWP IT system. It is this group of people whose payments are now automatically verified by DWP.
Withdrawals can take months to process
Previously, these women had to reclaim this money themselves by asking DWP. By doing so, they can claim to be earning at the right rate and receive retroactive payments on their husband’s 65th birthday (or when you reach statutory retirement age, if that is later).
But DWP is now systematically working its way through cases to find out who was underpaid. It said it would contact people directly by letter and they would automatically receive the money owed. Payments are made in the same way that people receive their state pension. However, the consideration of “special payments”, for example for interest losses, is not taken into account.
There is no timeframe for people to pay back, although DWP adds that the exercise can take months. When a person owed money dies, it is paid to the person’s estate. It’s unclear exactly how many women are affected or how much they owe, but it’s believed to be around 200,000 people with average payouts worth £ 13,500. Total payouts are estimated to be around £ 3 billion over the six years to financial year 2025/26. That was the result of a report released this week by the Office of Budgetary Responsibility.
We asked if you can still claim yourself or if you have to wait for DWP to contact you and we will update this story as soon as we know more. A DWP spokesman said: “The actions we are taking now will correct the historical underpayments made by successive governments and we will contact all those affected to ensure they get what they owe.”