New concerns over state pension errors raised by former minister

Fresh evidence that errors are still being made with some state pension claims has been uncovered, according to a former pensions minister.

The Department for Work and Pensions (DWP) has been undertaking a correction exercise since 2021 to fix previous state pension errors relating to certain groups of people, including some widows and widowers.

But Sir Steve Webb , a former pensions minister who is now a partner at LCP (Lane Clark & Peacock) said he had found evidence of a new group of cases where incorrect information was given.

It involves people claiming the new state pension who were already widowed when they retired.

Sir Steve said he had been contacted by four separate people who had not been awarded any inherited state pension when they retired and had been told in writing or over the phone by the department that they were not entitled.

You would hope that DWP would be making sure that new claims are handled correctly. But we have found worrying evidence that this is not the case

In all four cases, this was incorrect and an increased amount of state pension has been arranged and arrears have been paid, Sir Steve said.

In two of the cases, the underpayment amounted over £2,000 per year, which could potentially add up to a £40,000 shortfall over a typical retirement.

Sir Steve said one of the people he dealt with had said: “I  personally would like to see more people come forward to claim what is rightfully theirs.”

In general, the new group appears to include those who are widows or widowers at the point when they claim their new state pension and where either the spouse who has died reached pension age before April 6 2016 or where they died before April 6 2016, Sir Steve said.

The exact amount of inherited state pension depends on individual circumstances, but could be higher if the late spouse was an employee, rather than self-employed and the widowed spouse is not receiving a widow’s pension from a company pension scheme (as this may replace part of any inherited state pension due).

Sir Steve said: “Having had to spend years checking hundreds of thousands of historic state pension calculations for errors, you would hope that DWP would be making sure that new claims are handled correctly.

“But we have found worrying evidence that this is not the case.

“There seems to be a particular problem for people who are widows or widowers when they claim their state pension.

“In some cases DWP seems to have failed to automatically add any inherited state pension they were due from a late partner.

“These cases may well be the tip of an iceberg.”

Delays can occur to a customer's state pension award when not all the information we need is provided. In these cases, we will make a state pension award based on the customer's own national insurance record until we have the required information

LCP has developed an online tool to help people understand what state pension they are entitled to inherit on top of their own state pension at go.lcp.com/inheritingstatepension.

A tool previously launched by the company to help married women check for underpayments had over one million visits.

Sir Steve added: “The department needs to launch an urgent investigation into the scale of this problem.”

The DWP also has a tool to help those receiving the new state pension assess their eligibility for inherited state pension amounts at www.gov.uk/state-pension-through-partner.

There is also a guide on inheriting or increasing a state pension at www.gov.uk/new-state-pension/inheriting-or-increasing-state-pension-from-a-spouse-or-civil-partner.

A DWP spokesperson said: “We want to ensure pensioners receive all the support to which they are entitled and have a tool to help them understand what state pension they can inherit.

“Delays can occur to a customer’s state pension award when not all the information we need is provided.

“In these cases, we will make a state pension award based on the customer’s own national insurance record until we have the required information.

“Once we have the necessary documentation, we will then revise the customer’s claim as soon as possible.”