pension savings

Labour calls for proactive efforts to backpay women losing out on State Pension

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Posted on: 10th July 2020

The government has recently resisted against pressures to track down elderly women who have been underpaid by thousands of pounds in state pension when fielding questions in Parliament, which will have had a significant effect on their pension savings. Labour urged Pensions Minister Guy Opperman to investigate the scandal recently uncovered by This is Money’s, Steve Webb.

According to Opperman, the DWP are looking into the matter and have welcomed those who believe they may have been affected to contact the Pension Service helpline or Pension Wise.

Shadow Pensions Minister Jack Dromey told the House of Commons: “Case after case has been uncovered of retired women underpaid on their pension.

“Many don’t know yet to this day. Some have tragically died before learning of the department’s mistake.

“When will the department work out how many women have been affected, who they are and bring forward a plan to contact them.”

Labour MP Nick Smith said: “Informed commentators say that over a hundred thousand women are going to be impacted by this error.

“Many of them will be old women more likely to be living in poverty.”

While some women have received full payouts, others whose husbands reached state pension age before March 2008 are only getting one year of back-pay and increased sums going forward.

Labour has pressured the government by asking a series of questions, including whether it will pay any sums owed to the heirs of women who have died while receiving the incorrect state pension allowance. They also asked what the tax liability will be for those who receive backpay of their underpaid state pension in a single financial year.

Speaking with This is Money, the Government’s tax arm said: “HMRC is working with the DWP to determine any tax implications of these payments as soon as possible.”

Webb said: “With more and more women coming forward to report underpaid state pensions, there is no doubt that there is a systematic problem here.

“It is not good enough for the DWP to ask people to come forward one by one. The government has had long enough to review this issue – it is time for action.”

“DWP must use its own records to track down the women who are missing out as a matter of urgency.

“The current response to this issue is woefully inadequate.”

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