The New Year is a good time for people to do a simple check to see if they are getting the right amount of state pension, according to LCP Partner Steve Webb. This is especially true now that DWP claims to have completed the process of checking for errors for key groups of state pensioners.
The exact rules depend on whether people come under the old or new state pension system, but anyone whose state pension is less than £93.60 per week should now be asking to get it checked.
Old State Pension
For anyone who reached pension age before 6th April 2016 and who comes under the old state pension system, there are two groups of people who should be getting a pension of £93.60 per week or more:
- Anyone aged 80 or over who satisfies a basic residence test (see notes to editors) they are entitled to a pension of £93.60 a week regardless of their record of NI contributions, their income or their marital status;
- Married women with a husband over state pension age; if the husband has a full basic state pension, then the wife can claim a ‘married woman’s pension’ of £93 per week; the same also applies in the (less common) case where it is the husband who has a low pension in his own right and the wife has a full basic pension; note however that where the husband is on less than a full basic pension (currently £156.20 per week) because of gaps in his record, his wife’s ‘married woman’s pension’ would be scaled down accordingly.
The pension system has sometimes failed to deliver the correct pension to these two groups. DWP has been undertaking a major correction exercise, which started in 2021, in order to fix these errors. As at end October 2023, DWP said it had corrected underpayments for around 37,000 married women and 27,000 over 80s, paying out arrears totalling over £270m.
However, DWP has said that it is expected to complete all corrections for these two groups by the end of 2023. This means that anyone in these two groups who is still on the wrong rate of pension is very unlikely to be contacted by DWP and now needs to take action.
With regard to the over 80s, there are two scenarios:
- Anyone who was getting some rate of basic pension but short of the £93.60 standard rate should have been automatically upgraded to the £93.60 rate when they turned 80;
- Anyone who was not getting any basic state pension when they turned 80 became entitled to the £93.60 rate, but only if they put in a claim.
For married women, there are also two scenarios:
- For married women with a pension below the £93.60 rate and whose husbands reached pension age on or after 17th March 2008, their pension should have been increased automatically;
- For married women with a pension below the £93.60 rate and whose husbands reached pension age before 17th March 2008, an increase to £93.60 was available, but only in the event that they made a further state pension claim.
Individuals on less than £93.60 per week should make sure that they have put in a claim for it if necessary.
New State Pension
Broadly speaking, anyone with 16 or more years of NI contributions or credits should get a state pension of £93 or more. This is because 16/35 of the full rate of £203.85 is £93.18 per week.
If someone is on a pension lower than this amount, it may be because NI credits for years at home with children (previously known as ‘Home Responsibilities Protection’) are missing. In this case, the individual should claim the missing NI credits using the CF411 claim form. If added to someone’s record, this should increase their weekly pension and generate a payment of arrears.
In addition, women who were paying the ‘married woman’s stamp’ 35 years before they reached state pension age qualify under a special concession and are entitled to a £93.60 pension. In some cases, however, the DWP has missed these cases and should be challenged.
Commenting, LCP Partner Steve Webb said:
“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. The New Year is an ideal time to get this sorted once and for all.”