'Little known' state pension loophole could see thousands of women handed £45,604 from DWP

The Government has committed to reimbursing a lesser-known pension loophole, which could see many women across the UK be entitled to reclaim significant sums they were previously owed.

The eligibility criteria is quite specific, but Britons are urged to check as the pay out could be life changing.

Who is eligible?

Women who reached state pension age before April 2016 and are on the zero basic state pension could be among those eligible.

However, they must also have a husband who turned 65 before March 17, 2008.

Women in this group who are currently receiving less than 60 per cent of their husband's state pension may be entitled to an increase up to 60 per cent of his pension amount.

This loophole could see many women across the UK be entitled to reclaim significant sums they were previously owed. In many cases, its tens of thousands of pounds.

Money saving expert Martin Lewis and his MoneySavingExpert team explained how these women can claim their dues.

On the website it states: "Under a little-known rule, women in this specific group are allowed to claim back underpaid pensions ALL the way back to when their husband started to draw his state pension (typically at age 65).

"This is because they're deemed as having 'deferred' their pension rather than having been underpaid it, as they never had a basic state pension to begin with."

The current rate of married women’s pension is £93.60 a week, and one year’s worth of this from 2008 to 2021 would give someone £45,604.

People can either take this amount of backdated payments as a lump sum or choose to defer it and take much higher pension payments for the rest of their life.

Millions of ‘Waspi women’ could receive compensation and an apology from the Department for Work and Pensions over state pension changes.

Women born between April 1950 and April 1960 had their state pension age changed from 60 to 66, but this was not communicated properly, the Parliamentary and Health Service Ombudsman (PHSO) has said

The ombudsman found that some women were notified of the change to their pension age less than a year before they had been expecting to retire at 60. This left them without enough time to adjust their savings plans.

The PHSO has recommended a Level 4 payout of between £1,000 and £2,950 to recognise the “significant” and “lasting impact” suffered by many women.

If the Government agrees to this compensation level, it could mean a total cost to the taxpayer of between £3.5billion and £10bn.

However, the DWP has argued that compensation at Level 3, below £1,000, would be “consistent” with previous payouts made to claimants.

The Government has not yet confirmed that any level of compensation will be paid to the affected women.

A spokesman said: “We will consider the ombudsman’s report and respond in due course, having co-operated fully throughout this investigation.

“The Government has always been committed to supporting all pensioners in a sustainable way that gives them a dignified retirement, whilst also being fair to them and taxpayers."