Thousands of over-80s wrongly missing out on £82 a week state pension – how to claim
MORE than 107,000 over-80s are missing out on weekly state pension payments of £82, prompting calls for government action.
About £400 million is going unclaimed by pensioners every year, according to research from consultancy LCP.
From the age of 80, everyone is entitled to an £82.45 weekly state pension payment regardless of their previous National Insurance contributions.
But more than 65,000 women and 42,000 men, aged 80 and over, are owed payments but have not claimed them, LCP found.
Here we explain why so many people are missing out, who is eligible and how to claim this state pension payment.
Why over-80s are missing out on pension payments
If you’re aged 80 or over, you are immediately entitled to what’s called a Category D pension payment of £82.45 a week.
This is a non-contributory payment, meaning you do not need to have paid any National Insurance in the past to be eligible.
The government automatically rolls many people onto the Category D payment if they're already receiving a state pension prior to the age of 80.
However, over-80s who previously received no state pension have to claim the Category D payment themselves.
The government does not notify these pensioners that they are eligible to claim the payments, according to former pensions minister Sir Steve Webb.
This means many are likely unaware they are owed state pension money.
What are the different types of pension?
WE round-up the main types of pension and how they differ:
- Personal pension or self-invested personal pension (Sipp) – This is probably the most flexible type of pension as you can choose your own provider and how much you invest.
- Workplace pension – The Government has made it so it's compulsory for employers to automatically enrol you in your workplace pension, unless you choose to opt out. These so-called defined contribution (DC) pensions are usually chosen by your employer and you won't be able to change it. Minimum contributions rose to 8% in April 2019, with employees now paying in 5% and employers contributing 3%. This is up from the 5% of contributions workers and companies were required to pay in previously, where employees contributed 3% and employers 2%.
- Final salary pension – This is a also a workplace pension but here, what you get in retirement is decided based on your salary, and you'll be paid a set amount each year on retiring. It's often referred to as a gold-plated pension or a defined benefit (DB) pension. But they're not typically offered by employers anymore.
- New state pension – This is what the state pays to those who reach state pension age after April 6 2016. The maximum payout is £179.60 a week and you'll need 35 years of national insurance contributions to get this. You also need at least ten years' worth of national insurance contributions to qualify.
- Basic state pension – If you reached the state pension age on or before April 2016, you'll get the basic state pension. The full amount is £137.65 per week and you'll need 30 years of national insurance contributions to get this. If you have the basic state pension you may also get a top-up from what's known as the additional or second state pension. Those who have built up national insurance contributions under both the basic and new state pensions will get a combination of both schemes.
If a pensioner doesn't claim the payments until months or years after their 80th birthday, they'll be unable to get back the money they missed out on.
For example, an 84-year-old man, who realised he's eligible for the pension payments and made the claim, would only get paid going forward but wouldn't receive the four-years worth of money he's been entitled to.
Webb is now urging the Department for Work and Pensions (DWP) to automate the system by identifying those who are eligible and ensuring they get their entitled payment.
He said: “It is shocking that there are so many older people who are getting no state pension at all.
“In particular, when we have a special state pension payable to those over 80 which does not depend on National Insurance Contributions, it is hard to understand why over 100,000 people over 80 are still on zero pensions.
“The Government needs to do much more to identify those who are on zero state pensions and to make sure that they draw the pension to which they are entitled”.
Webb added that the burden to claim the pension should not fall on pensioners.
He said that with an automated system, if the government initially fails to idenfity a pensioner as eligible for payments, they should be entitled to receive any back pay.
Meanwhile, Sarah Coles, from Hargreaves Lansdown, said other reasons why people may not have claimed the pension is they do not know they are eligible.
She said some people may assume that because they couldn’t get the payment in the past, they won’t be eligible now.
For example, a retiree may not have lived in the UK for long enough to qualify when they turned 80, but now they have aged 85.
Coles added: “There may also be language issues because some people are in this bracket because they lived overseas for most of their working lives.”
Baroness Ros Altmann, also a former pensions minister, added that it is “vital” the government help people understand their pension entitlements.
She said: “If they know of people who are not receiving the money they are due, then an urgent information campaign is needed to ensure all our elderly pensioners are supported as much as possible, especially after all they have suffered during the pandemic.”
Tom Selby, a senior analyst at AJ Bell, said it is a “national scandal” that so many people have not received the state pension they are entitled to after the system changed in April 2016.
“Given the Government has created this mess, it should take responsibility for putting it right by proactively rooting out those people who have been underpaid and making sure they get the money they are owed,” he added.
Who exactly is eligible?
Pensioners cannot get the Category D payment if they’ve reached state pension age on or after 6 April 2016.
You can check when you reach state pension age using this government tool.
People can claim this over-80s pension if all of the following apply:
- You’re 80 or over
- You do not get basic State Pension or your basic State Pension is less than £82.45 a week in 2021 to 2022.
- You were resident in England, Scotland or Wales for at least 10 years out of 20. This does not have to be 10 years in a row but this 20 year period must include the day before you turned 80 or any day after.
- You were “ordinarily resident” in the UK, Channel Islands, Isle of Man or Gibraltar on your 80th birthday or the date you made the claim for this pension, if later.
How to claim
You can claim the payment as early as three months before your 80th birthday and anytime afterwards.
To do so, you can download the state pension claim form and send it to your local pension centre
Alternatively, you can pick up forms in person from your nearest pension centre or local Jobcentre Plus branch.
For more advice, you can contact the DWP on 0800 731 0469.
A DWP spokesperson said: “We want everyone to claim the benefits to which they may be entitled and we urge anyone of State Pension age – or their family and friends – to check if they are missing out on financial support.
“Anyone that thinks they may be eligible to receive a State Pension can find out how to apply via Gov.uk.”
Earlier this year it emerged that around 200,000 women had been undepaid their state pension for years and could be in line for an average payout of £13,500.
We've also put together a comprehensive guide of the state pension increase that came into force in April.
Martin Lewis' MoneySavingExpert also recently that warned millions of retirees are missing out on £3,000 a year in lost pension credit.
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