At Magenta, when we work with you on your financial and life plans for a secure future, we try to factor in all possible variables such as your current and future income and expenditure as well as any assets and liabilities.
We go to great lengths to be as accurate as possible, often digging out old pension money and investments that people have lost or forgotten about and in some cases reclaiming overpaid tax. But sometimes, things are out of our control and the numbers that we need, to show you what your financial future holds and whether you can afford to live your desired lifestyle, are just wrong!
A big mistake
You may have heard on the news that the Department for Work and Pensions has historically made mistakes in the calculations of state pensions for tens of thousands of women.
The underpayments may range from £1,000s to £10,000s and so it is worth checking to see if you are one of the women who has been underpaid. The problems affect married women who hit state pension age before April 2016, plus widows, divorcees and the over-80s – whether married or not. While some women owed should now get an automatic payment, not all will.
The groups that won’t automatically get their pensions topped up are as follows:
– A woman who got divorced AFTER retiring and who hasn’t got their pension reassessed.
– A woman whose husband turned 65 before 17 March 2008 and who is being paid less than 60% of their husband’s basic state pension.
Other women should receive their tops ups automatically and should be contacted by the Department for Work and Pensions (DWP) over the next few months if eligible.
This is definitely worth following up!
One lady got in touch with the Government’s Pension Service, who agreed that something was wrong. After 10 days she received £22,350 plus a further £645 in interest, and her pension has been increased from £135 per month to £326 per month!
Magenta clients can be certain that we will have checked their numbers in light of these revelations, if we are clear about when they retired etc. If we need more information, this issue will definitely be discussed at your next meeting as we want to ensure that your planning is as accurate as possible and that you have all the money to which you are entitled.
More information
Rather than go into great detail here, we refer you to Martin Lewis’ excellent guide on this subject where you can find links to the organisations you need to contact if you think you are affected. You can find this here.
If you need some help on this, or other retirement related queries and decisions, please feel free to call us for a friendly chat.