Former pensions minister Steve Webb has warned that a new category of widows and widowers may have been underpaid their state pension, with some losing out by more than £2,000 a year. Webb, now a partner at consultancy firm LCP, said his team uncovered cases where individuals were incorrectly told they were not entitled to inherited state pension.
The Department for Work and Pensions (DWP) has been correcting errors since 2021, paying out over £280m to nearly 23,000 people. However, Webb estimates the total number affected could be higher than the DWP's figure of 55,000, potentially costing £650m.
Those most likely affected are widows or widowers claiming the new state pension whose late spouse reached pension age or died before 6 April 2016. They may be entitled to inherit at least 50% of additional state pension or graduated retirement benefit.
Webb urged the DWP to investigate the scale of the problem, calling the cases the 'tip of an iceberg'. The DWP said it wants to ensure pensioners receive all support they are entitled to and has a tool to help understand inherited pension rights.
