Modest: Former minister Steve Webb grew up in a household that was tight-lipped
Former Pensions Minister Sir Steve Webb says his biggest achievement since leaving office is fighting his former government department to get pensioners’ dues.
Using a Freedom of Information request, the former Liberal Democrat MP forced the Department for Work and Pensions to admit that it had paid an estimated £1 billion in state pensions to 130,000 people, mainly women.
He told Donna Ferguson that he helps many of these women with repayment claims. Webb, 56, who was knighted in 2017, is a partner at consultancy firm Lane Clarke & Peacock.
What did your parents teach you about money?
That’s hard to come by. When I was growing up, money was tight. My dad was an engineer who calculated the cost of construction projects.
My mother worked part time as a secretary. We lived near Birmingham and during the 1980s, when unemployment reached 3 million, my father lost his job several times. That’s why we never take money lightly. My mom and dad, who are now 86 and 90 respectively, would budget for the things they wanted to buy. It taught me to appreciate the value of money.
Have you ever struggled to meet your needs?
I have never been destitute or hungry, but when I was elected as the Liberal Democrat candidate for parliament in 1995 I had sleepless nights about how I would pay my bills.
At that time, I was working for a non-political organization, the Institute of Financial Studies, so I had to quit my job. I had to quickly find another one to pay off my mortgage.
Then, luckily, I met someone on a train who told me that the University of Bath had a job teaching social policy.
About a month after I left IFS I applied and was appointed. I remember saying this in interviews: ‘I stand for parliament in two years, but you don’t have to worry because I won’t win.’ At that time I was 11,000 votes behind. My election to Parliament in 1997 was by no means an expected career change.
Which was the best year of your financial life?
12 months after he lost his seat in 2015. I will not say how much, but till then I had earned only public sector wages. I was giving paid-for talks at impromptu events, dinners and conferences.
Your biggest achievement since leaving office?
Steve Webb answers your pension questions
I learned that the Department for Work and Pensions (DWP) underpaid about 1 billion to 130,000 people. As an MP, I enjoy helping people with problems, and as I write through a regular column for This Is Money (the Mail’s sister website on Sundays), I began hearing from people who were in their state. Inquired about the amount of pension.
I met one or two people whose payments I didn’t understand. When I wrote about their affairs, more people got in touch.
The DWP kept saying: ‘Oh yes, that was wrong and we’ve fixed it.’ But so many people came in contact that I suspected something more widespread was happening. Eventually, DWP conducted an investigation and it was discovered that it had underpaid £1 billion, mainly for women who retired before 2016.
Have you been paid less than the state pension? Find out what to do here
What did your former department do wrong?
If your spouse dies, if you are 80 and on a really low pension, or if your spouse retires and claims his pension, your state pension should be recalculated. This never happened for 130,000 pensioners. The government is now accepting it. Average repayment is between £7,000 and £8,000. In some cases, women have gained 100,000 pounds. there is An online calculator (at lcp.uk.com) Which can be used by married women to check if they are lost. Clearly, DWP can’t cope, so I’m helping people in my spare time. I find it beneficial.
What is your biggest money mistake?
I sold a property in London at a loss. I bought my first home, a one bedroom flat in Clapham, South London, in 1990 for £63,000. Then I got married and needed to sell it in the middle of a housing crash. I received £59,000 for a property that would be worth several million pounds today.
Do you save in pension?
yes i do I started saving in pension at the age of 25. As a former pension minister, I have observed that there are benefits of pension that people often miss out on.
The first is that when you have a workplace pension, and your employer puts the money in for you, it’s very difficult to find a better deal elsewhere. If you put £1 in your pension, and your employer puts in £1, it’s a 100% return on your money. Another is that pensions can be invested in a variety of assets, including commercial property. I believe a lot in diversification.
When did you first become interested in investing?
When I was a teenager – my dad was an investor. When he had a little extra money, he liked to invest in…