HMRC sending letters to thousands of people who could be owed £5,000
HMRC is writing to thousands of women who may have been short-changed their state pension due to a huge error.
The issue was highlighted last year by former pensions minister Sir Steve Webb, who explained it mainly affects stay-at-home mums who made a claim for Child Benefit between 1978 and 2000. Your state pension entitlement is based on your National Insurance record - but in some cases where the person was claiming Child Benefit, the National Insurance credits they should have received were not transferred across properly.
National Insurance credits help you build up your qualifying National Insurance years when you're out of work. They were previously known as Home Responsibilities Protection (HRP). HRP reduced the number of qualifying years you need to claim the state pension, and was available between 1978 and 2010 for parents and carers. Anyone who is affected could be owed an average of £5,000 each and the first 30,000 letters have now been sent to people who may be eligible.
You can read more about how to check if you're affected here
The letter writing exercise will run over the next 18 months, with those over pension age being prioritised. Katie Farrington, Director-General for Disability, Health and Pensions at the Department for Work and Pensions (DWP) said: “Those are for the older group, of State Pension age, and then those will phase through with further groups.
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"My understanding is the intention is to issue all of the letters across the next 18 months. The role of HMRC is to correct the National Insurance record and then we will then take any action that is then needed with the State Pension.”
Of the 210,000 people affected, the DWP expects to track down 187,000 - leading Sir Steve Webb to have previously issued a warning over some people potentially never receiving a letter. Mr Webb, who is now a partner at LCP, said: “It is truly shocking that so many people have been underpaid because of errors on their National Insurance record for time at home with children. It is even worse that tens of thousands of people, mostly mothers, died without ever receiving the correct state pension.”
A DWP spokesperson said: “The action we are taking now will correct historical underpayments made by successive governments. We are fully committed to addressing these errors, not identified under previous governments, as quickly as possible. We have set up a dedicated team and devoted significant resources towards completing this, with further resources being allocated throughout 2023 to ensure pensioners receive the support to which they’re entitled.”
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