State pensioners can secure a “maximum” state pension and avoid missing out on important retirement funds. The Department for Work and Pensions (DWP) revealed earlier this year that a shocking 6% of state pension claims are underpaid.
As a result, around 750,000 individuals may not be receiving the full pension sum to which they’re entitled. Some pensioners, especially women who reached state pension age before April 2016, may have experienced underpayments owing to a DWP error, affecting those who are married or widowed.
Contracting out could also affect pension amounts; individuals or their employers who did so paid less into the state pension, instead contributing more to private or workplace pensions. More than 35 qualifying years are generally needed to earn the full rate of new state pension for those who were contracted out.
To determine whether a state pension is underpaid, contacting the Pension Service is advised. The DWP typically contacts people who have been underpaid to issue a payment.
Checking a state pension forecast is also possible via the HMRC app or by submitting a BR19 application form by post, reports Birmingham Live.
Mistakes in National Insurance records
The issue mainly impacted stay-at-home mothers who claimed Child Benefit between 1978 and 2000, as National Insurance credits vital for building state pension entitlement were sometimes not properly allocated.
National Insurance credits, previously known as Home Responsibilities Protection (HRP) until 2010, accumulate your qualifying National Insurance years when you’re not working. HRP reduced the number of qualifying years required to claim the state pension for parents and carers.
Those affected could be owed an average of £5,000 each. However, it is estimated that around 60,000 of the 210,000 people affected are now deceased, and their families can make a claim for any money owed.
Universal Credit mistakes
Mistakes with Universal Credit may have resulted in claimants not receiving the automatic NI credits they were entitled to. If you claimed UC and you’re not getting the full state pension amount, it’s advised to check your national insurance record to ensure you haven’t missed out.
Even if you’re not yet of state pension age, you can still check your record to confirm that all the years that should be recorded have been. If any are missing, contact the Universal Credit helpline, or speak to your work coach or case manager.
Married women and over-80s
Until 2008, older women whose husbands had retired could claim an increase in their state pension payments if they completed a claim form for the DWP. However, many women missed out because they did not receive these forms as they were only dispatched if their husbands ticked a box on their own state pension claims document.
Once the women realised they were eligible, their claims could only be backdated for 12 months. However, the ombudsman’s investigation will determine whether these claims could be backdated for over 10 years.
Sir Steve Webb, former pensions minister and Liberal Democrat MP, now a consultant at LCP, estimates that “potentially over 100,000” women were affected, with some sadly passing away before they could receive the correct pension. He suggested that many of these women would have lost out on approximately £10,000 since their husbands retired, although for others the sum will be “a lot more”.
People who receive less than £93.60 a week
Steve Webb advises anyone whose state pension is less than £93.60 per week to request a review. Mr Webb stated: “Now that the DWP has finished checking for state pension errors among married women and the over 80s, anyone still on a low pension needs to take action. The ‘magic number’ is £93.60 per week.”
“The vast majority of pensioners should be getting at least this amount. Anyone on less than this amount needs to contact the Pension Service to see if an error has been made and/or if they need to put in a further claim to get the higher rate.”
Next of kin to those affected
A response to a freedom of information (FOI) request by consultants LCP revealed that as of the end of July 2024, 1,859 people who had received letters from the DWP informing them about potential underpayments of state pension to their late parents or late spouse had not responded.
