14 Aug 2024

New state pension error impacting widows - have you been underpaid?

A new tool has been launched for pensioners to check their entitlement

Widowed pensioners are being urged to check they are being paid the correct state pension, following concerns the Department for Work and Pensions (DWP) may be making an error related to recent claims.

Former pensions minister Steve Webb, now a partner at pensions consultancy firm Lane Clark and Peacock (LCP), has raised the alarm and said the issue affects those who were widowed before retiring and are now claiming the new state pension.

Here, Which? explains the error and how to check whether you are receiving the right amount of state pension.

New error impacting widows and widowers

The new issue involves the DWP failing to automatically add any inherited state pension that widowed pensioners were due from their late partners.

Webb said he had been contacted by four people who had not been awarded any inherited state pension. The DWP told them they were not entitled. However, this was incorrect. As a result, their state pensions have been boosted, and they have been paid arrears.

He is urging the DWP to launch an investigation into the scale of the problem and LCP has launched an online tool where pensioners can check the amount they are entitled to.

Webb said: ‘These cases may well be the tip of an iceberg, with many thousands of people potentially underpaid. In the meantime, I hope that our new online tool will help people to check what they are entitled to and to report any errors.’

In response, a spokesman from the DWP said: ‘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.’

Find out more: widow's pension and bereavement support

Who may be affected?

The group most affected are likely to be those who are widows or widowers at the point when they claim their new state pension and where either:

The late spouse reached pension age before 6 April 2016 or
The late spouse died before 6 April 2016.

The widow or widower can potentially inherit at least 50% of any ‘additional state pension’ ( a top-up people to the basic state pension) built up by their late spouse, plus 50% of any ‘graduated retirement benefit’ (a previous version of an earnings-related state pension top-up).

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

In general, the amount of inherited state pension anyone is due can depend on several factors including whether you and your spouse come under the old or new state pension system, and if your spouse was a member of a ‘contracted out’ occupational pension scheme.

Find out more: how much state pension will I get?

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How to check your state pension entitlement

As these rules are complex, LCP has created a free tool to help understand what state pension you are entitled to inherit if your spouse or civil partner has died or what you can expect to inherit if your spouse dies before you.

The tool can be found on the LCP website where you will be asked to go through several options. LCP said it does not store any personal data and warned users to seek independent financial or legal advice before making any financial or investment decisions.

The DWP also has a tool to help those receiving the new state pension assess their eligibility for inherited state pension amounts.

Find out more: how much could the state pension pay in 2025?

Other state pension errors to be aware of

The DWP is in the process of repaying a large number of parents, mostly mothers, who were underpaid their state pension due to an error relating to 'Home Responsibilities Protection' (HRP), which is missing from their National Insurance record.

According to DWP's annual report and accounts for the previous tax year (2023-24), just £2.2m out of an estimated provision of £1.15 billion had been paid out so far, as of March this year.

This error is in addition to the current correction exercise - known as a Legal Entitlements and Administrative Practices (LEAP) process – to correct the official errors where some groups of pensioners were found to have underpaid their state pension.

As of 31 March, the government has repaid £594m to 99,558 individuals who were underpaid their state pension due to system errors. This total includes around 44,000 married women, 23,000 widows/widowers and 33,000 people over 80.