I hope you can help me after reading one of your previous articles on married women’s national insurance payments.
I was born in 1952. Since last November I have been trying to get a pension forecast from the Department for Work and Pensions to see if I can afford to retire.
I am married and my husband is alive and receives a state pension. I paid a married woman stamp for over 30 years and still working but now exempt from paying NI.
Pension funding: DWP wrongly offers a lump sum of £6,000, not £32,000, after the state pension was deferred for eight years (stock image)
I finally received a letter from the DWP saying to contact them under this reference, but no reference number or details are on the letter.
The letter says I have deferred applying for a state pension since 2014 and my weekly rate would be £14.94. I think it says I would get an extra £12.34 per week if I had started pension from October 2022.
I just received the letter but when trying to call, the number changed. I thought about writing, but then I thought about how long it took for this answer – almost a year – so I thought I’d try you first.
Can you help me or just clarify what I should expect to receive. I think it might be £85 per week depending on your column.
The government website says you can dispute your amount once you have claimed it, but I would really like to know that now so it is correct from the start.
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Steve Webb responds: After delaying your retirement for about eight years, it is obviously important that you can now get accurate information about what you are entitled to so that you can make an informed choice.
I am shocked that it took almost a year to receive a letter from the DWP about this and – as I will explain – that the information in it is completely false.
Even if you have not yet applied for your state pension, due to your year of birth (1952), you fall under the old state pension system, before significant changes were made in 2016.
In this system, when you delay claiming your pension, you can either have a much larger pension when you finally retire, or opt for a lump sum (plus a little interest) for any missed payments.
When you reached retirement age in 2014, your husband had not reached statutory retirement age, so your entitlement at that time was solely based on your own National Insurance record.
As you paid the reduced “married woman’s stamp” for several decades, you had built up very little full state pension.
However, the point the DWP seems to have omitted from their original letter is that in 2016 your husband reached retirement age.
At that time, you were entitled to a married woman’s pension based on her contributions. In today’s money, that would be worth at least £85 a week.
The first letter you received from the DWP (which took almost a year to obtain) made no mention of this increased pension based on your husband’s contributions.
The letter referred to an initial pension entitlement in 2014 of just under £15 a week and gave you the choice of a permanent ‘bonus’ of around £12 a week if you wanted to take a higher regular pension or a single package. sum of just over £6,000.
This was obviously wrong as it did not take into account that your husband was reaching retirement age during the deferral period.
My concern is that if you hadn’t been vigilant and made contact, you might have missed over £26,000 of a lump sum that was rightfully yours.
When I took up your case with the DWP, he wrote you a second letter which contained very different information.
They are now quoting you a basic pension of £85.75 a week (based largely on your husband’s contributions).
Plus, as you’ve deferred for eight years, they now offer you the option of a regular raise of an extra £65 per week on top or a lump sum over £32,000.
Your experiences show how important it is to challenge state pension awards and notifications if you are unsure how they were calculated or suspect there might be an error.
My concern is that if you hadn’t been vigilant and made contact you might have missed over £26,000 of a lump sum that was rightfully yours.
I often wonder how many other people have found the DWP so difficult that they eventually gave up and just accepted what they were paid. Your example shows that it is always worth persevering.
A DWP spokesperson said: “We apologize for the incorrect information initially provided to Ms. [name deleted] and sent him an updated state pension forecast that outlines his rights and options for taking his state pension.
Ask Steve Webb a question about retirement
Former Pensions Minister Steve Webb is This Is Money’s Agony’s uncle.
He’s ready to answer your questions, whether you’re still saving, quitting work, or juggling your finances in retirement.
Steve left the Department for Work and Pensions after the May 2015 election. He is now a partner in actuary and consultancy firm Lane Clark & Peacock.
If you would like to ask Steve a question about pensions, please email him at email@example.com.
Steve will do his best to respond to your message in an upcoming column, but he won’t be able to respond to everyone or correspond privately with readers. Nothing in his answers constitutes regulated financial advice. Published questions are sometimes edited for brevity or other reasons.
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If Steve is unable to answer your question, you can also contact MoneyHelper, a government-backed organization that offers free pension assistance to the public. He can be found here and his number is 0800 011 3797.
SteveWe get a lot of questions about state pension forecasts and about COPE – contracted pension equivalent. If you write to Steve on this subject, he answers a typical question from a reader here. It includes links to several of Steve’s previous columns on state pension forecasts and contracting out, which might be helpful.
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