LCP has launched a tool to help widowers check their state pension after it alleged errors are still being made with some state pension claims.
The online tool aims to help people understand what state pension they are entitled to inherit on top of their own state pension.
This comes after former pensions minister and LCP partner Steve Webb identified a new group of cases where DWP appears to be making errors.
This is in relation to people who are claiming the new state pension, who were already widowed, when they retired.
According to Webb he was contacted by four separate people who had not been awarded any inherited state pension when they retired.
They were also told by DWP in writing or over the phone that they were not entitled to it.
Webb said in all four cases this was incorrect with an increased amount of state pension now put into payment and arrears paid.
According to LCP, the group most affected by this are 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 April 6 2016
- The late spouse died before April 6 2016
In this case, the widow or widower can potentially inherit at least 50 per cent of any ‘additional state pension’ which the late spouse built up, plus 50 per cent of any ‘graduated retirement benefit’.
Webb urged the DWP to launch an investigation into the issue to uncover the full scale of the problem.
“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, with many thousands of people potentially underpaid,” he added.
According to LCP, the amount of inherited state pension a person may get depends on individual circumstances but would be greater if the spouse was employed rather than self-employed and the widow or widower is not receiving a widow’s pension from a company pension scheme.
Historically DWP has made errors in regard to widows and widowers with the department making corrections to fix previous errors.
For example, as of March 31 2024 more than £280mn had been paid in arrears to around 23,000 widows and widowers who had wrongly missed out on inherited state pension from a late husband, wife or civil partner.
And with the correction of historic errors for this group set to run to the end of 2024, DWP has estimated the total amount paid out could be more than double this figure, at around £650mn to more than 50,000 widows and widowers in total.
