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Wales Online
Wales Online
National
Emma Munbodh & Neil Shaw

200,000 pensioners could get £13,500 after being underpaid

200,000 women who have been underpaid in their state pension could be in line for an average handout of £13,500.

The women on the 'old' state pension have been underpaid for 20 years reports The Mirror.

The Department for Work and Pensions said the error was in automatic cash increases for some married women, widows and over-80s dating back to 1992 with "enhanced" pensions.

It estimated the bill for tackling the shortfalls to be about £2.7billion.

The scale of the underpayments came to light in the details of a report by fiscal watchdog the Office of Budget Responsibility (OBR) report which was published alongside the Budget.

A review will now take place involving the assessment of hundreds of thousands of cases - including cases where the person potentially owed money has since died.

The OBR said: "The underpayment affected married women whose husbands reached pensionable age before 2008 and who were unknowingly entitled to 'enhanced pension' that would have boosted their payments by up to 60%.

"Our forecast reflects an initial estimate that it will cost around £3billion over the six years to 2025-26 to address these underpayments, with costs peaking at £0.7billion in 2021-22."

Former pensions minister Steve Webb said: "This figure is truly mind-numbing. When we first looked into this issue a year ago I had no idea it would explode into such a huge issue.

"Repayments of £3billion over the next five years imply huge numbers of women have been shortchanged, potentially for a decade or more.

"The Government needs to devote serious resources to getting these repayments out quickly as these women have waited long enough."

The underpayment relates to women who reached pension age before 6 April 2016.

Under the old rules, married women who had a poor pension in their own right could claim a 60% basic state pension based on their husband's record of contributions.

However, some of these pension were not automatically increased at a certain point.

The DWP said: "The action we are taking now will correct the historical underpayments that have been made by successive governments and anyone impacted will be contacted by us to ensure they receive all that they are owed."

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