Thousands of women are entitled to five-figure payouts due to underpaid pensions

Women currently receiving £1 a week for their pension could be entitled to ‘lottery-win’ sized payouts, according to a former pensions minister.

Sir Steve Webb, who is now a partner at consultants LCP (Lane Clark & Peacock), said some women may be entitled to huge refunds but could be missed by data searches currently being carried out by the Department for Work and Pensions (DWP).

It is thought that as many as 5,000 women could be due a windfall.

Sir Steve estimated the total bill if all these women claimed could easily be a quarter of a billion pounds.

‘Little-known rule’

He said women he had helped recently included one who was entitled to £56,000 in back pension, another to £33,000 and a third to more than £60,000.

Some women were until recently on pensions of only around £1 per week, he said.

Sir Steve said that under a little-known rule, women in this specific group were allowed to claim back pension to before a 2008 rule change, which has prevented many other married women from making backdated claims.

Three main elements made up the old state pension system: a basic state pension, an earnings-related pension (also called Serps) and an older graduated retirement benefit (GRB), which ran from 1961 to 1975 and was a forerunner of Serps.

The women who qualify for this special concession are those with no basic pension but who are receiving a tiny amount of GRB.

They can make a backdated claim today all the way back to when their husband turned 65, Sir Steve said.

Carole Davies, whose husband retired in 2005, said: "After four months of looking for answers from the DWP we enlisted the help of Sir Steve Webb and, to my amazement, the DWP have now confirmed all my due monies will come to me.

"I would advise all women in my position to seek advice and push hard for everything they are due as it is their right."

In March, documents revealed in the Budget showed thousands of women who were underpaid the state pension were in line for top-ups, with the bill put at around £3 billion.

‘Make contact with the DWP as soon as possible’

But Sir Steve said the group of 5,000 women were likely to be missed by the DWP's data search - and they should contact the department as soon as possible to see if they were owed money.

He said: "It is incredible that there are thousands of women getting such tiny pensions, but even more incredible that many could potentially be entitled to tens of thousands in back payments.

"It is as if they are sitting on unclaimed winning lottery tickets. It is very important that women on these very small pensions make contact with the DWP as soon as possible to see if they could be entitled to a windfall."

A DWP spokesman 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."