United Kingdom

My wife had 13 years of underpaid state pension but can get just one back

My wife recently contacted the Department for Work and Pensions to change some bank account details about where her state pension should be sent.

During the course of the conversation she was told she was not getting enough state pension, as she was only getting 39 per cent of my state pension when she should be getting 60 per cent.

They said they would have written to her about claiming this in the past but she is not aware that she ever received such a letter.

State pension: DWP underpaid an elderly married woman for 13 years, she has discovered

They sent her a form to claim the additional pension, which she completed and returned earlier this month, but it appears this will only be backdated for 12 months even though she is now 80 years of age.

My wife is 80 and I am 78. I reached retirement age in 2006.

Are the 39 per cent and 60 per cent figures correct, and, if so, when did these figures come into effect?

Is it correct that she can only claim 12 months' back pay? If so, is there any appeal against that decision as it could mean her losing out on several thousands of pounds? Any advice would be very welcome.

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Steve Webb replies: Unfortunately you and your wife have fallen foul of a rule change in the state pension system. 

As a result, your wife has missed out on thousands of pounds in state pension over the last 13 years. 

I will explain what has happened and hope that, at the very least, your experiences may alert others to the fact that they may be missing out.

As you have gathered, for those covered by the old state pension system (those who reached pension age before 6 April 2016) there was an option for married women with low pension entitlement in their own right to draw a state pension based on their husband’s record of National Insurance contributions.

This pension would be payable at 60 per cent of the basic pension rate at the time. Eligibility would start when the husband reached state pension age – in your case in 2006.

Your wife reached pension age in around 1999, and at that stage her pension would have been based purely on her own record of NI contributions.

Many married women of your wife’s generation reached pension age with gaps in their NI record, so the figure of a 39 per cent record is entirely plausible.

Since March 2008, what now happens is that when the husband reaches 65, the DWP should automatically increase the wife’s state pension from the lower rate (based on her contributions) to the 60 per cent rate (based on the husband’s contributions).

Unfortunately, before March 2008 it was necessary to make a claim to get the pension uplift and DWP say that your wife did not make such a claim back in 2006.

Now that you have been made aware of the issue, your wife has been able to put in a claim and this can be backdated by a maximum of 12 months. Whilst you can appeal against this decision, I suspect they will say that they have no legal duty to go back any further.

Are you being underpaid state pension? 

This could be an issue if you are:

- A married woman over state pension age, who reached pension age before 6 April 2016 AND

- Your husband is over state pension age AND

- Your husband had a full state pension in his own right AND

- You are getting a weekly state pension less than £77.45 per week

If you think you might be affected by this issue, write to Steve Webb at [email protected] and put DWP CLAIM in the subject line. 

Please include brief details and a phone number – this will only be used to follow up this issue, not for any marketing purposes.

However, I can’t help thinking that when the DWP removed the need to claim the uplift in 2008 they should have gone back through their records, found the people who had failed to make a claim and automatically uprated them.

After all, if they can automatically uprate people now, then they must have all the data they need on their system.

That aside, given that the onus was on the individual to claim an uplift prior to March 2008, this makes me think that there could be quite a few more married women in the same position as your wife.

A married woman who reached state pension age under the ‘old’ rules (that is, before 6 April 2016) and whose husband is over state pension age should, in principle, be getting at least 60 per cent of the basic state pension, provided that her husband has a good contribution record.

As the full basic state pension is currently £129.20, the 60 per cent rate is £77.45. 

Married women who are getting less than this may wish to contact the DWP Pension Service to get their entitlement checked. 

Furthermore, a married woman covered by the old system and who has now been widowed should in most cases be getting at least £129.20, again provided that her late husband had a good contribution record.

We would be interested to hear from readers who find out that they are not getting this uplift.  

ASK STEVE WEBB A PENSION QUESTION 

Former Pensions Minister Steve Webb is This Is Money's Agony Uncle.

He is ready to answer your questions, whether you are still saving, in the process of stopping work, or juggling your finances in retirement.

Since leaving the Department of Work and Pensions after the May 2015 election, Steve has joined pension firm Royal London as director of policy.

If you would like to ask Steve a question about pensions, please email him at [email protected]

Steve will do his best to reply to your message in a forthcoming column, but he won't be able to answer everyone or correspond privately with readers. Nothing in his replies constitutes regulated financial advice. Published questions are sometimes edited for brevity or other reasons.

Please include a daytime contact number with your message - this will be kept confidential and not used for marketing purposes.

If Steve is unable to answer your question, you can also contact The Pensions Advisory Service, a Government-backed organisation which gives free help to the public. TPAS can be found here and its number is 0800 011 3797.

Steve receives many questions about state pension forecasts and COPE – the Contracted Out Pension Equivalent. If you are writing to Steve on this topic, he responds to a typical reader question here. It includes links to Steve's several earlier columns about state pension forecasts and contracting out, which might be helpful. 

If you have a question about state pension top-ups, Steve has written a guide which you can find here.