Around 200,000 women could be entitled to an average back payment of £13,500 thanks to an error made by the Department for Work and Pensions (DWP).

The Treasury has announced it is setting aside some £2.7 billion to pay back these women in Rishi Sunak’s latest Budget, with a further £90 million set aside every year to keep up with the adjusted higher payouts. The details were not announced by Sunak, but mentioned in the Office for Budget Responsibility’s (OBR) fiscal report accompanying the Budget. The DWP says that following an internal investigation of old State Pension data it found many women had been paid less than their State Pension entitlement over many years.

Who is eligible for back payments?

Women who are owed money from their State Pension entitlement fall into one of the following groups, as explained by DWP:

• People who are married or in a civil partnership who reached State Pension age before 6 April 2016 and may be entitled to a Category BL uplift based on their partner’s National Insurance contributions.
• Following a change in the law in 2008, when their spouse became entitled to a State Pension, some people should have had their basic State Pension automatically reviewed and uplifted. Underpayments occurred in cases when this did not happen.
• People who have been widowed and whose State Pension was not uplifted to include amounts they are entitled to inherit from their late husband, wife or civil partner.
• People who have not been paid the Category D State Pension uplift as they should have been from age 80.

The Government says no action needs to be taken by individuals who think they may be affected as the DWP will be in touch to arrange repayment.

If you think you have been affected however, there are a few things you can do to ensure you receive what you are entitled to. This includes making sure your information is up to date with the government Pensions Service so you don’t miss any letters.

But you can also proactively speak to the Pensions Service (using the same link above) if you think you or a loved one are entitled to the uplift.

Of course, if you are unsure or would like to discuss the issues raised in this article, or for any other pensions-related queries, please don’t hesitate to get in touch with your financial adviser for help.