National Insurance Pension Underpayments

Lord Wigley Excerpts

Thursday 13th March 2025 Lords Chamber

[Baroness Sherlock (Lab)]

My noble friend raises a really important point. There is a lot of complexity, particularly in the old basic state pension. With the new state pension, your entitlement depends on your own national insurance contributions in the majority of cases, so in future it gets a lot more straightforward. Most people claim their new state pension online, so getting it is mostly automated. However, under the old state pension, if you did not have enough pension in your own right, you could inherit it from a civil partner or a spouse, or a divorced partner or a late spouse. That has led to all kinds of complexities. We are making sure that before someone reaches state pension age, the Pension Service writes to them to tell them what they have to do to claim their state pension. As part of that process, they have to give us the details that enable us to work out if they are still carrying forward any entitlements from partners’ contributions as well as their own.

So, we are really committed to making sure there is clear, accurate, accessible information out there about the state pension. There is lots of it online, on GOV.UK. There is even a tool called “Your partner’s National Insurance record and your State Pension”, which, while not imaginative, is a pretty clear description of what it does. If anyone would rather not go online, they can ring the Pension Service, which will talk them through it. We are really determined to help people get this right.

[Lord Wigley (PC)]

My Lords, will the Minister give an assurance that beneficiaries who have been denied the benefit to which they are entitled will be paid in full, however far back it goes?

[Baroness Sherlock (Lab)]

My Lords, some of the cases in the LEAP exercise go back to 2006, so this is already going back a very long way, but I can reassure the noble Lord that that the exercise went back through the book. This is really complicated, as I am sure he understands, but, in summary, the exercise specifically addressed women who reached the state pension age ahead of their husbands. That was not uncommon because, in those days, the retirement age for women was 60 and for men it was 65, so the woman got to the state pension age first. If she did not have enough pension in her own right and her husband reached the state pension age, she could then have inherited more state pension from his contributions. After 2008, that should have been done automatically by the DWP. Earlier, people had to claim, but where the DWP failed to do that automatically, the department has gone back through the entire book and made payments to all those people. That is what the system has been doing.