Following the death of her husband after countless years of marriage, Doreen didn’t expect her financial situation to change too much in the long term as she had earned her own state pension through her career. However, the retiree soon found she was £150 short on her DWP payments.
Blindsided by the change and completely confused as to what caused it or how she could fix it, the reader turned to The Telegraph’s pension expert Charlene Young explaining her situation. Doreen shared: “My husband died in January this year. Following his death DWP has reduced my state pension.”
She explained that she was fully employed from 1967 until 2011, when she retired, and paid full National Insurance contributions throughout those 44 years. Because she retired before 2016, Doreen fell under the old state pension scheme meaning she received the basic amount plus some additional state pension as well as the graduated retirement benefit.
Her husband, on the other hand, received a reduced state pension rate because he was “contracted out” during some of his career. All of this left Doreen feeling her state pension shouldn’t change when he died, but a month later the DWP had dropped her sum by £150.
It seemingly course-corrected as Doreen added: “Even with the annual increase last April I am receiving over £50 less a month than before. I had not expected to receive anything from my late husband’s state pension and have advised DWP that I would not wish to do so on the basis that I am worse off.”
While she had been in touch with the DWP herself, Doreen slammed their responses as unsatisfactory and urged the pension expert for help. Charlene explained that being contracted out meant Doreen’s husband fell in a peculiar grey area as this is part of the old system but he retired after 2016, making him eligible for the new state pension.
The old system closely linked a husband’s National Insurance to their wives’ state pension, but because her own National Insurance was higher she should still be receiving her entire basic state pension sum. Unfortunately, the link will affect her Serps entitlement, the additional state pension Doreen received, which will be reduced by the amount of widow’s Guaranteed Minimum Pension element she receives from her husband’s workplace pension that he contributed to while being contracted out.
Charlene also highlighted that the DWP should provide Doreen with calculations, upon request, to show the impact of any widow’s GMP. Additionally, the expert urged Doreen to check she’s receiving widow’s pension and if not to make a request “as a matter of urgency” or even lay a complaint with the Pension Service.