"Old state pension paperwork may conceal a hidden windfall” – families urged to use festive period to check

Old paperwork on state pensions could be hiding past underpayments worth thousands of pounds according to Steve Webb, partner at consultants LCP.

This could be a particular issue for widows who are now on the correct rate of state pension but who were underpaid in the past when their husband was still alive. These women are unlikely to be identified by the DWP when it checks its records for underpayments because these women’s current payment is correct. Unless elderly widows or their families check for historic underpayments they may never get the money they were due.

CASE STUDY – Mrs Mary Jones*, Gloucestershire

Mrs Jones was widowed earlier this year and is now on the correct rate of state pension. But when she read about under-paid state pensions, she recalled that before she was widowed she was only on a state pension of around £45 per week and wondered if this was correct. When she eventually got through to DWP, and having explained that it wasn’t her current state pension she was querying, they agreed to investigate. It turned out she had been under-paid since her husband turned 65 in 2011, and has now received a backdated lump sum of £14,000.

Background

DWP has accepted that there are married women who are currently missing out on the correct rate of pension because their pension was not increased when their husband turned 65. At that point they became entitled to a basic state pension at 60% of their husband’s rate. If the husband turned 65 after 17th March 2008, that increase should have been awarded automatically. DWP has promised to search its records to find those who are currently missing out, and several thousand married women have already phoned DWP and made successful proactive claims. However, if there is a problem with some married women getting the wrong rate today, it follows that there will be women who are now widowed who were previously married women on the wrong rate – even if they are on the right rate now as widows. And if DWP only checks the amount people are *currently* receiving, they will never find the women who missed out in the past.

This is where the Yuletide record check comes in!

How do you know if you were underpaid?

LCP have prepared a webpage which can be used by widows or family members to check if they were underpaid in the past. The webpage provides details of the standard ‘married woman’s rate’ of pension each year back to 2010/11. If a widow has paperwork which shows that her rate of state pension was below this standard rate while she was still married, this may indicate a past underpayment, especially if she is in the group who should have had an automatic uplift when her husband turned 65.

Many people will have kept old paperwork relating to their state pension or old bank statements and may be able to check their past figures. The widows or their family members can then use the webpage to check for any past underpayment and make a claim if appropriate.

Commenting, Steve Webb, partner at LCP said:

“We know that thousands of today’s married women are getting the wrong rate of state pension. It is therefore inconceivable that there are not also thousands of widows who were underpaid in the past while their husband was still alive. In a quiet moment over the festive period it would be worth checking for old pension paperwork to see if you are one of them. If so, you could be due thousands of pounds in underpaid pension, especially if you should have been awarded an automatic uplift when your husband turned 65. I hope that widows, possibly aided by family members, will use a few moments of time together at Christmas to check this out and potentially enjoy a New Year windfall”.

Note:

1. Those who believe they have been underpaid can contact the Pension Service on 0800 731 0469.
2. *Mrs Jones received news of her lump sum this month after contacting DWP in the Summer. This is not her real name as she has asked for her anonymity to be protected, but all other aspects of the case study are accurate.