The Work and Pensions Committee (WPC) has written to the Department for Work and Pensions (DWP) to raise concerns about the impact of state pension underpayments on divorcees, and whether the rules in place to help savers are working effectively.

The DWP previously launched an exercise to correct state pension underpayments, after a freedom of information request revealed that "tens of thousands" of women were not receiving the correct state pension uplifts.

Figures from the Office for Budget Responsibility suggested that the government could face a £3bn bill over the "systematic underpayment", with a report from the National Audit Office estimating that DWP has underpaid over £1bn in state pensions to around 134,000 pensioners.

As part of the correction exercise, the DWP has been manually reviewing at risk married, widowed and over 80s pensioner cases, with the latest update confirming that it had repaid £571.6m to individuals impacted by historical state pension underpayments as of 29 February 2024, having identified 97,016 underpayments.

However, Timms argued that another group potentially underpaid includes men and women who are divorced but do not qualify for a full Category A state pension, who may be able to use their former spouse’s National Insurance contributions to increase the amount of their basic state pension.

This is not the first call for action on this issue, as Timms pointed out that former Pensions Minister, Steve Webb, also previously urged the government to include divorced women in its correction exercise.

In addition to this, Timms noted that the Public Accounts Committee previously recommended that DWP explain how it assesses the risk of systemic underpayments to divorced women.

And whilst DWP’s response at the time found “no evidence of systemic error due to missing action taking on notifications of divorce”, Timms argued that there is evidence that some divorced men are also affected.

“For example, a man divorced might be entitled to less than the full amount of the basic state pension based on his own contributions, but to the full amount once the contributions of his former spouse are taken into account” he explained.

Given this, he asked DWP to confirm whether such a man, divorced at the time of claiming the state pension, should be entitled to the full amount from the date of claim, and whether DWP will review the decision to exclude divorced people from the current correction exercise given the progress the department have now made in correcting underpayments to married women and over-80s.

The call for action was welcomed by Webb, who added: “Given the massive scale of errors on state pensions for married women, widows and the over 80s, it is stretching belief to think that divorced people’s pensions have all been worked out perfectly.

“A particular issue is cases where DWP was notified of a divorce post-retirement and whether this always resulted in a state pension reassessment.

"For any given individual the difference could be very substantial, especially where a woman had a poor NI record but her ex-husband had a full record. DWP should do a thorough search for potential errors of this sort”.

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