"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."
- Steve Webb, partner at LCP and former pensions minister
A long-running battle for justice for tens of thousands of married women pensioners has reached a major milestone this week following a decision by the Parliamentary Ombudsman to launch a full investigation. If successful, the campaign could cost the Government hundreds of millions of pounds in state pension arrears.
The issue relates to the position of a large group of married women who reached pension age under the old state pension system who missed out on thousands of pounds because of what former pensions minister Steve Webb calls an "archaic and sexist system". The investigation will look at a sample of seven ‘lead cases’ brought to the Ombudsman with the support of Webb, now partner at LCP, alongside other complainants on the same issue.
The issue affecting women's state pensions
Prior to a rule change in March 2008, married women could claim a state pension at age sixty but were initially awarded a pension based purely on their own record of NI contributions. If they had spent time at home raising a family or had other interruptions to their work history, this pension could often be very low, potentially as low as 25% of the full basic pension. However, when their husband drew his state pension, married women could get an uplift to a 60% pension based on their husband’s contribution.
Crucially, this uplift only happened if they made a further state pension application once their husband retired.
Many thousands of married women simply assumed that having once applied for their state pension they would be paid the correct rate and did not know about having to apply again.
If the married woman did not make a second claim she would remain on her low pension indefinitely. If she later found out about the potential uplift – as many married women have done in recent years – they were only allowed to backdate the increase for one year. Such women have potentially lost out on more than a decade of increased pension.
More shockingly still, the main way such women were meant to know what to do was that their husband had to tick a box on his state pension pack, so that two state pension claim forms would be sent to him, one of which he was to give to his wife. The tick box explicitly says: “We will send you a form for your wife to fill in”.
This system meant that married women could miss out if the husband failed to tick the box, the 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.
It is believed that all three of these factors may have been at work in different cases.
In March 2008, the rules were changed so that this uplift happened automatically without the need for a further claim, but the ‘pre 2008’ married women did not benefit from this rule change.
The complaints process
Steve Webb has been supporting large numbers of these women in complaints of ‘maladministration’ first to the DWP, then to the Independent Case Examiner and now finally to the Parliamentary Ombudsman. The whole complaints process has in some cases taken three years to get to this stage.
The major development this week is that the Ombudsman’s office has now written out to the lead complainants to say that the Ombudsman has begun a ‘detailed investigation’ into this group of complaints.
In the event of a successful outcome, there is the potential for a ruling to apply not just to the lead complainants but to all of the women who have lost out, including thousands who died without ever receiving the correct pension.
Whilst there is no exact figure for the number potentially affected, Steve Webb estimates that it is likely to be in the ‘high tens of thousands’, and potentially over 100,000. Some of these women will have lost out by £10,000 or more in the period since their husband retired. If full compensation is awarded, the final bill would be likely to run into hundreds of millions of pounds.
The Ombudsman will now undertake an in-depth investigation, including obtaining details from DWP of all the information available to married women at the time and what letters people were sent. It will then share preliminary findings with DWP and the complainants before reaching a final recommendation.
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. 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 women I have spoken to are all intelligent people who do not ignore official correspondence and who would clearly have claimed their uplifted pension if they had realised a second claim was needed once their husband retired. The fact that they did not know this was needed indicates a system which let them down and has cost them in many cases thousands of pounds through no fault of their own. I look forward to seeing what the Ombudsman concludes at the end of her inquiry.”
