State pension disaster as Britons at risk of £40,000 retirement shortfall due to DWP 'errors'
State pension errors could still be getting made, according to Sir Steve Webb
GETTY
State pension claim errors could still being made by the Department for Work and Pensions (DWP) with some Britons at risk of losing up to £40,000, according to a former Government minister.
Since 2021, the DWP has been in the process of correcting previous pension errors impacting certain groups of people, including widows and widowers, which resulted in many getting underpaid.
Sir Steve Webb, a partner at LCP, claims he has found evidence that this course correction has not been successful with incorrect information being given to a new group of cases.
Specifically, these mistakes relate to people claiming the new state pension who were already widowed when they retired.
According to Webb, he was reached out to by four different people who had not been given any inherited state pension once they had reached retirement.
Furthermore, these people had been told in writing or over the phone by the DWP that they were not entitled to an inherited amount.
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Widows are being impacted by historic state pension errors
GETTYIn each of these cases, this was incorrect and an raised amount of state pension has been arranged with arrears having been paid, the LCP partner revealed.
The state pension underpayment came to over £2,000 per year to two of the four cases, which could potentially lead to a 40,000 retirement shortfall.
One claimant told Webb: “I personally would like to see more people come forward to claim what is rightfully theirs.”
LCP's research determined that the new group getting underpaid the state pension include those who are widows or widowers at the point when they claim their new amount.
It also included claimants where either the spouse who has died reached pension age before April 6 2016 or where they died before April 6 2016.
How much someone gets from their inherited state pension is dependent on their individual circumstances, Sir Steve says.
The former pensions minister explained: "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."
For those looking to see if eligibility for for inherited state pension amounts, the DWP has an online tool to help people see what they can get. Furthermore, there is a guide people can use on inheriting or raising their state pension entitlement.
As well as this, LCP has its own online tool to inform Britons how much inherited state pension they are entitled to inherit on top of their own state pension.
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Britons' pension pots have not gone far enough during the cost of living crisis GETTY 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."