A few months ago, I read an article saying that children could inherit their late parents’ unclaimed pensions, or part of them, after their death.
Although I read the article and understood the mechanics, I now cannot find it again and I am wondering whether this is really possible.
My parents died at 69 and 71 respectively, and my wife’s parents died at 62 and 70, so I would love to follow up on inheriting the pensions.
Unclaimed pensions: Those who think they may be entitled to inherit a parents’ pension can fill out a form online and the DWP will conduct a search
As far as I can see, there is no information on any Government website.
Was the article correct in stating that children could inherit unclaimed parental pensions – and if so, what are the rules and how do you do it?
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Steve Webb replies: There are some very limited circumstances in which a child might be able to receive an inheritance based on their late parent’s state pension, and I will explain these below.
But in general, the only other person who can benefit from someone’s state pension contributions is a spouse or civil partner, and even those rights are gradually being withdrawn.
The first case in which a family member might be able to receive an inheritance on the basis of a parent’s National Insurance contributions is where the parent put off claiming their state pension, and died before receiving it.
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If the parent has no surviving spouse and dies having deferred taking their state pension, their estate may be able to claim three months’ worth of pension. You can read more details here.
Any claim would have to be made relatively promptly after the person died – you cannot go back years and claim for deferred state pension that was never received.
Note also that this information relates only to cases where the deceased person reached pension age before 6 April 2016 and came under the ‘old’ state pension system.
The second case, and the one I think you are referring to, is where you believe that your late parents (or parents-in-law) might have been underpaid state pension because of the errors which we have repeatedly highlighted on This is Money in recent years.
The good news is that DWP have recently created a website which allows people to lodge details of the person who died. They will then check if there was any error and make a payment to the estate if an error is found. You can register details here.
As you will see, the website goes through the sorts of situations in which people may have been underpaid (eg a woman whose state pension was not reassessed when her husband died).
It also sets out the information which you would need to supply which includes full name, date of birth, date of death, last known address plus details of any spouse. If you have National Insurance number details that will help speed up the process.
Whilst this website is a useful tool and avoids people having to phone a number and get through to the right person, there are a few words of caution I should add.
The first is that DWP may dispose of records some years after a person has died. As a general rule, if someone’s NI record is still ‘in use’ (eg a husband has died but his widow is claiming a pension based on his contributions) then the record will be retained, but once it is no longer in use it would typically be deleted after about four years.
This means that people whose loved ones died many years ago may find it is now impossible to check, based on official records, if someone was underpaid
The second word of caution is that DWP would be keen to avoid ‘fishing trips’ where everyone puts details of family members into the site on the off chance that there may be some entitlement.
In the interests of making sure that people who may have a genuine entitlement can get their applications processed efficiently, I would encourage anyone using this site to read the information and only submit details if you think a loved one might have fallen into the categories described.
DWP has said that its own comprehensive trawl for errors will include those who are now deceased, so in principle any errors should ultimately be found as part of that exercise where NI records still exist, and payments will then be made to estates.
