State pensioners set for £10,000 payouts from DWP after being 'underpaid' due to error

A major update has been issued after tens of thousands of married female retirees were underpaid the state pension due to a government error.

Tens of thousands of married women retirees are one step closer to getting millions of pounds in state pension arrears after the Parliamentary Ombudsman agreed to fully investigate the issue. A major update has been issued after tens of thousands of married female retirees were underpaid the state pension due to a government error.

The Parliamentary Ombudsman confirmed this week that it will launch a full investigation into the issue. Until 2008, older women whose husbands had retired could claim a boost in their state pension payments if they filled in a claim form for the Department for Work and Pensions ( DWP ).

However, women often only knew about the requirement if their husband ticked a box on his own state pension document. This would prompt a claim form to be sent to the husband, rather than his wife. It led to many women missing out on higher payments. Once they realised they were eligible, their claims could only be backdated for 12 months.

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Prior to a rule change in March 2008, married women could claim a state pension at age 60 but were initially awarded one based purely on their own record of national insurance (NI) contributions. This pension could often be very low if they'd spent time out of work, for childcare or other reasons.

An uplift only happened if the married women made a further state pension application once their husband retired, leading to thousands missing out as they did not know about having to apply again. Sir Steve Webb said: “This is a major milestone in a long-running campaign for justice for thousands of married women. I am delighted that the Parliamentary Ombudsman has decided to undertake an in-depth investigation into these complaints."

If married woman did not make a second claim, they would remain on her low pension indefinitely. If they later found out about the potential uplift – as many married women have in recent years – they were only allowed to backdate the increase for one year.

Sir Steve added: “In my view, these women fell victim to a fundamentally sexist and archaic system which relied largely on married men ticking boxes and passing on claim forms to their wives.” The mistake means women could miss out if the husband failed to tick the box, the Department for Work and Pensions (DWP) only issued one form rather than two, or the husband failed to pass on the second form, perhaps wondering why he had been sent a duplicate.

A DWP spokesperson said: “We are committed to ensuring pensioners have the dignity and support they deserve in retirement and will cooperate fully with the Ombudsman’s investigation.” Some of these women will have lost out by £10,000 or more since their husband retired, Sir Steve said.