How to claim an underpaid State Pension

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Well over 100,000 women have been underpaid their State Pension, and the numbers keep on rising as new errors are identified. Check to see if you or a loved one could be among them and what to do about it.

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Among the people affected by State Pension underpayments are married women, widows, divorcees, the over 80s — and their families — and their numbers continue to rise.

Last year, the National Audit Office estimated that 134,000 pensioners – mostly women – were owed an average of £8,900 each, amounting to total underpayments of over £1 billion. This year, it raised those estimates even higher, saying that around 700,000 potential cases need to be reviewed by the government and there could be as many as 237,000 people affected. 

The situation has been called a “shameful shambles” by the Chair of the Public Accounts Committee of MPs, Dame Meg Hillier, and no one is yet certain about the final numbers of people or average underpayments involved. But it’s possible you or a loved one are among them, especially if you (or they) reached State Pension age before April 2016.

Why are so many people receiving less State Pension than they should?

The State Pension underpayments saga is due to a variety of factors including computer errors, information not being recorded properly on people’s records, the complexity of the pension system, and the way it was designed after the Second World War. 

But more important than looking into the historical causes is to work out what you can do now about any missing State Pension payments owed to you. With the Department for Work and Pensions (DWP) now working its way through its records, some people have already received their State Pension top-up and others will get their missing payments automatically this year or next, but some people will need to make a claim themselves. 

Has my State Pension been underpaid?

There are several different groups of people affected by unpaid pensions, and we’ll warn you up front that working your way through the dates and details of these groups can feel like being in a maze. However, the first question is relatively simple: did you or a loved one reach State Pension age before or after April 2016?

• Reaching State Pension age in April 2016 or afterwards means you or they are unlikely to be affected by the underpayments issue because you receive the new State Pension.
• Reaching State Pension age before April 2016 means you or they may be affected, especially if you didn’t have a full National Insurance record or full State Pension entitlement.
   

Underpaid State Pension checklist: who can claim?

The main affected groups identified so far include the following (though, of course, it’s possible that other groups will emerge). The point above about reaching State Pension age before April 2016 applies to all of these:

• People who are married or in a civil partnership whose spouse/partner turned 65 before 17 March 2008 and whose State Pension is less than 60% of their partner’s basic State Pension. For example, many married women didn’t know they were entitled to 60% of their husband’s pension under the old pension system, so did not claim it. They could now be owed a boost, including some backdated payments, but will need to make a claim.
   
• People who got divorced post-retirement and whose pension does not take account of their ex-spouse’s (or civil partner’s) National Insurance contributions. These people may also be owed a top-up, and will need to make a claim themselves.
   
• People who are married or in a civil partnership who turned 65 before 17 March 2008, are not receiving anything in basic State Pension, but are receiving a small amount from additional State Pension (also called SERPS). Some of this group have been receiving as little as £1 a week and can claim 60% of basic State Pension back to the date their spouse reached 65. The amounts involved can be huge. Anyone who thinks they or a loved one are in this group should make a claim themselves.
   
• Anyone who is 80 or more and is not currently getting at least £85 a week. These pensioners don’t need a full National Insurance contributions record, but they do have to satisfy a basic residency test. You should be notified automatically by the DWP if you are in this group but may also want to check yourself.
   
• People who are widowed and whose State Pension did not increase when their spouse died. Potentially, depending on their late spouse’s National Insurance record, they could be entitled to a boost up to the full State Pension (currently £141.85), plus some of their additional State Pension. This group should, in theory, be identified automatically by the DWP, but it may be worth checking anyway.
   
• People who now receive the correct level of pension but perhaps were underpaid (receiving less than 60% of the full basic pension) while their spouse was still alive. This has happened with some widows whose spouse reached pension age after 17 March 2008, and again it is worth checking if you think you are in this group.
   
• The families or heirs of people who were underpaid State Pension while alive. Some will be notified automatically, but others may have fallen through the net because records no longer exist for them, so will need to claim (see below).

It’s possible that men may be eligible for underpaid State Pension top-ups. But, in practice, they are more likely than women to have a full National Insurance record, less likely to rely on a spouse or partner for their State Pension entitlement and, therefore, less likely to qualify for a top-up.

Are your State Pension payments everything they should be?

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If you want to know the rates for previous years, you’ll find a useful list if you scroll down here on the DWP website. It goes right back to September 1971, when the full State Pension was just £6.00 a week.

How can I make a claim for an underpaid State Pension?

The State Pension correction exercise is being managed by the Pension Service, and you can contact them by phone on 0800 731 0469 (Monday to Friday, 8am to 5pm) or write to them at: The Pension Service, Post Handling Site A, Wolverhampton, WV98 1AF. When contacting them, it’s recommended that you have:

• Your National Insurance number
• Details of what you currently receive (this should be on your annual statement)
• Your spouse or civil partner’s name, date of birth, date of death (if applicable) and National Insurance number
• Details of how much your spouse or civil partner receives in State Pension (or whatever they received before their death)

What if the person who has been underpaid has died?

Thousands of people who were underpaid their State Pension have already died, and their families or heirs may be eligible for the underpayments. The DWP recently launched a dedicated website page to help these families. The page explains who may be affected, and there’s a link to request information. 

How much unpaid State Pension could I be owed?

Initially, the average payment was estimated at just under £9,000 but individual amounts paid vary widely, partly because different types of claims have different backdating rules, and also because some people may be able to claim in more than one category.

Some married women who were only receiving a SERPS pension and no State Pension have received £40,000 or more, while other people may not receive any backdating at all, but at least will receive the full amount from now on. Do be aware that some (not all) back payments may affect your tax situation or benefits entitlement.

Wider lessons from State Pension underpayments

Whether or not you or a loved one are owed underpaid State Pension, there’s a big lesson here for all of us: it’s really important to get to grips with the State Pension, what you are entitled to, and whether it is paid to you correctly.

Whatever age you are, whatever your marital or civil partnership status, and whatever your pension arrangements, it’s worth doing some homework on your State Pension entitlement, and any other pension plans you have. At a time when there’s so much talk of rising bills and the increasing cost of living, a boost to your retirement income could be more welcome than ever.

The information here is based on our understanding in September 2022 and shouldn’t be taken as financial advice. If you are unsure, you should speak to a financial adviser and there is likely to be a charge for advice.

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