A MAJOR update has been issued after tens of thousands of married female retirees were underpaid the state pension due to a government error.

The Parliamentary Ombudsman confirmed this week that it will launch a full investigation into the issue.

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Failings in the old state pension system left potentially more than 100,000 married women without the payments they were due.

These women have been contacted and informed that a “detailed investigation” has begun into this group of complaints.

If successful, the Government could be forced to hand out hundreds of millions of pounds in state pension arrears to all of the women who missed out.

This could include thousands of women who died without ever being paid the correct pension.

Former Pensions Minister Sir Steve Webb criticised the previous system, calling it “archaic and sexist”.

“This is a major milestone in a long-running campaign for justice for thousands of married women,” he said.

“The fact that they did not know this was needed indicates a system which let them down and has cost them in many cases thousands of pounds through no fault of their own.”

These women did not ignore official correspondence and would clearly have made a claim had they realised it was needed one their husband retired, he added. 

Sir Steve estimates that some of these women will have lost out by £10,000 or more in the period since their husband retired.

How did the error happen?

Prior to a rule change in March 2008 married women could claim the state pension at age 60.

This was initially awarded purely based on their own National Insurance record, which showed how many years they had made contributions.

If they had spent time at home raising a family or had other gaps in their employment history then their state pension could be very low.

For many, this could be as little as 25% of the full basic pension.

But when their husband claimed his state pension married women could get an increase in the amount they would receive.

If their husband had made enough contributions then the amount of state pension they would receive could increase to as much as 60% of the full basic pension.

But this uplift only happened if they made a further state pension application once their husband retired.

Tens of thousands of married women assumed that because they had already applied for the state pension they would be paid the correct amount.

Those who did not make a second claim would remain on the low pension indefinitely.

If they found out about the potential uplift later they could only backdate their claim by one year, leaving them thousands of pounds out of pocket.

In cases seen by Sir Steve Webb some women potentially missed out on more than a decade of increased pension payments.

More shockingly still, many women were only notified of what they needed to do to claim if their husband ticked a box on his state pension pack.

Doing so would mean that two state pension claims forms were sent to him, one of which was to be given to his wife.

Failure of the husband to tick the box or to pass on the form to his wife would mean that she missed out.

Meanwhile, she could also be unfairly penalised if the DWP only sent one form rather than two.

When did the rule change?

The system was changed in March 2008 so that married women received a state pension uplift automatically without needing to make a further claim.

But women who had made a claim before 2008 did not benefit from the rule change.

During the investigation, the Ombudsman will ask the Department for Work and Pensions for all of the information available to married women when the letters were sent.

It will then share its preliminary findings with the DWP and those making a claim before it reaches a final recommendation.

What can I do about it?

You can contact the DWP directly and query whether you have been affected.

Another option is to use an online tool or advice site to see whether they can help.

An online tool launched by Sir Steve Webb on behalf of actuarial firm LCP can help married women check if they might be affected.

You can then contact the pension service to get your state pension entitlement reviewed.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories

For several years, Masato Kanda hardly slept.

“Three hours a night is an exaggeration,” he laughs as he speaks to the BBC from Tokyo.

“I slept for three hours consecutively before being woken up but I then went back to bed, so if you add them up, I got a bit more.”

So why was this 59 year-old bureaucrat’s schedule so punishing?

Until the end of July, he was Japan’s vice finance minister for international affairs, the country’s top currency diplomat, or yen czar.

Key to the role was fending off currency market speculators that could trigger turmoil in one of the world’s largest economies.

Historically, authorities intervened to weaken the value of the Japanese currency. A weak yen is good for exporters like Toyota and Sony as it makes goods cheaper for overseas buyers.

But when the yen plummeted during Mr Kanda’s time in office it increased the cost of importing essential items like food and fuel, causing a cost of living crisis in a country more used to seeing prices fall rather than rise.

In his three years in the role, the value of the yen against the US dollar weakened by more than 45%.

To control the yen’s slide, Mr Kanda unleashed an estimated 25 trillion yen ($173bn) to support the currency, marking Japan’s first such intervention in almost a quarter of a century.

“The Bank of Japan and the Ministry of Finance are very clear. They intervene not at a particular level of the currency, but they intervene when market volatility is too much,” says economist Jesper Koll.

Japan now finds itself on the US Treasury’s watchlist of potential currency manipulators.

But Mr Kanda argues that what he did was not market manipulation.

“Markets should move based on fundamentals but occasionally they fluctuate excessively because of speculation, and they don’t reflect fundamentals which don’t change overnight,” he says.

“When it affects ordinary consumers who have to buy food or fuel, that is when we intervened.”

While countries like the US and UK can raise interest rates to boost the value of their currencies, Japan had for years been unable to put up the cost of borrowing due to the weakness of its economy.

Professor Seijiro Takeshita of the University of Shizuoka says Japan had no other option other than to intervene in the currency markets.

“It is not the right thing to do, but in my opinion it is the only thing they can do.”

The irony is that the yen’s value jumped in recent months without Mr Kanda or his successor lifting a finger after the Bank of Japan surprised the markets with a rate hike, and the country got a new prime minister.

So was the $170bn bid to prop up the yen a waste of money?

No, says Mr Kanda and points out that his interventions actually made a profit although he emphasises that it was never a goal.

On whether or not his actions were ultimately successful he says: “It is not up to me to evaluate, but many say our exchange management stopped the excessive level of speculation.”

Markets or historians should be the final judges, he adds.

After decades of economic stagnation, Mr Kanda also sounds an optimistic note about Japan’s prospects.

“We are finally seeing investments and wages rising, and we have a chance to go back to a normal market economy,” he says.

A more surprising legacy for this “humble public servant” is him becoming a star on the internet after Japanese social media users celebrated his ability to surprise financial markets with a series of AI generated dancing videos.

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Microsoft chief executive Satya Nadella expressed a common view in the tech industry when he said recently that large language models, the engines behind the generative AI boom, are becoming “more of a commodity”.

With a handful of leading model-builders vying for bragging rights with each new iteration of their AI, it is becoming hard to separate OpenAI’s latest GPT from Anthropic’s Claude or Google’s Gemini. 

That makes it all the more notable that Nadella’s Microsoft has just lined up behind OpenAI’s latest funding round, boosting its valuation to $150bn. Will this moment be looked back on as the peak of generative AI mania?

Valuing any fast-growing tech company in a new market is notoriously difficult. But the extent to which generative AI has transformed the tech landscape and the speed of OpenAI’s emergence have left investors groping for yardsticks and historical comparisons.

First, consider what it has built. ChatGPT, launched nearly two years ago, became a hit consumer brand almost overnight and now claims 250mn users a week. The $20 monthly subscription fee paid by a small minority has lifted its annualised revenue to $3.6bn.

OpenAI could also be on the way to becoming a wider tech platform. Many other companies have integrated its AI into their own products and services. The tools it is building to make its technology more useful in the business world have given it a rare opening in the enterprise market.

It is tempting to draw parallels with earlier hot start-ups, such as Google. When the search company’s stock market value first hit $150bn, in 2006, it was not the clear winner in search that it went on to become, with less than half the market. Its $10bn in revenue that year was similar to the $11bn OpenAI is reported to project for next year.

But it is here that the comparisons break down, and the scale of the challenge ahead for OpenAI becomes more apparent. Google was already churning out cash in 2006. OpenAI, without a functional business model, is on track to burn through more than $5bn of cash this year, with little prospect of stemming the flow in the short term.

Along with the sharply escalating expense of training ever-larger models, the considerable computing power needed to respond to users’ prompts will continue to weigh heavily on margins as it grows. Nor does it seem to be able to use pricing as a weapon. Although it has brought down prices rapidly to match greater efficiencies in responding to queries, the costs of querying for other LLMs that are available through the main cloud services have fallen pretty much in parallel.

That points to OpenAI’s biggest challenge: the lack of deep moats around its business, and the intense competition it faces.

On the consumer side, Meta said last week that 500mn people are now looking at its Meta.AI at least once a month, a sign of the vast, captive markets available to OpenAI’s Big Tech rivals. Google and Meta also have ready-made advertising businesses, which have proved to be the best route to monetising large-scale digital audiences.

ChatGPT can point to a favoured position on the iPhone, thanks to a deal with Apple. But Apple is only making the chatbot available through its Siri assistant, and even then only for handling questions that are beyond the current capabilities of its own AI models — hardly a recipe for long-term success as OpenAI tries to cement its early consumer gains.

Competition on the enterprise side is also growing fast. Close ally Microsoft is diversifying away from its early reliance on OpenAI, while the capabilities of open source AI models have advanced rapidly, making them viable alternatives. Meta’s Llama hasn’t yet become “the Linux of AI”, as Mark Zuckerberg suggested last week, but the risk of commodification that Nadella warned about looms large.

At this point, it is worth remembering that generative AI is still in its infancy, and that the vast resources being poured into the technology could still hold big surprises and bring considerable unanticipated disruption.

OpenAI’s latest models hint at the potential. Its voice-powered GPT-4o has been credited with breaking new ground in naturalistic voice interaction, potentially opening up new consumer markets to AI. And it claims its GPT-o1 is the first model capable of breaking a complex problem down and reasoning its way to a solution. That could point to a future where AI models themselves take on more of the work in a business application, sucking value out of traditional software as they become more central to working life.

It is impossible to tell how far capabilities like these will advance and whether OpenAI can maintain a meaningful edge in model-building. But with the most powerful companies in tech closing fast, investors backing the group at $150bn will need a strong stomach.

richard.waters@ft.com

FUEL prices could soar if the Middle East conflict escalates, drivers were warned last night.

The cost of oil climbed by around five per cent in just two days to $76 per barrel, as Israel vowed to retaliate against Iranian missile strikes.

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One option open to the Israeli military is to hit Iran’s oil refineries — which despite western sanctions still supply many countries worldwide.

Analysts said a major escalation could take the oil price to $100 a barrel — driving up pump costs for motorists.

The warning comes at a time when petrol prices here have been falling.

They were down 6.5p a litre in September, putting £3.60 back into drivers’ pockets every time they fill up a 55-litre tank.

Petrol is now 134.9p a litre and diesel 139.5p — marking one of the biggest price drops in 24 years, the RAC says.

A second threat to prices is the Budget on October 30.

Chancellor Rachel Reeves will have to decide whether to keep the current fuel duty freeze, as well as a 5p reduction brought in by the Tories.

The Sun’s Keep It Down campaign has saved drivers £90billion in tax over 14 years.

AA boss Edmund King said: “Global oil prices tend to increase with any geo-political uncertainty.

“The Government should avoid the temptation to hike fuel duty in the Budget as drivers and industry would face a double hit.”

Fawad Razaqzada, analyst at City Index, said: “The extent of Israel’s response to Iran will influence how much geopolitical risk markets factor in. Crude oil could rise another $5 in the next few days if we see further escalation in the conflict.”

Bjarne Schieldrop, chief commodities analyst at SEB, warned a major escalation in tensions could push oil prices to $100 a barrel.

And David Oxley, of Capital Economics, said such a rise could add 13p to the cost of a litre.

About a fifth of global oil comes from the Gulf region.