Warning as up to 10 million people risk being underpaid in huge DWP blunder
The state pension records of up to ten million people who claimed Universal Credit may be incorrect, new figures suggest.
This includes up to 137,000 people who are already claiming their state pension, according to the National Audit Office (NAO).
The Department for Work and Pensions (DWP) used to automatically add National Insurance credits to claimants' records.
However, it moved to doing this manually in 2017/18 - meaning potentially millions of people may not have had their records updated.
This means some people may have potentially been underpaid their state pension in retirement, or wasted money buying National Insurance top-ups.
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Not everyone who is affected is definitely being underpaid.
Some people may already have enough National Insurance contributions from employment or other sources to be paid the maximum state pension.
The issue was first uncovered following an investigation by This is Money in February this year - the NAO this week said the “system issues” were fixed the same month.
Your state pension entitlement is based on your National Insurance record.
You need around 35 qualifying years of National Insurance contributions to get the full new state pension, or 30 years for the full basic state pension.
National Insurance credits help you build up your qualifying years when you're not making contributions - for example, if you're out of work.
It is unclear exactly how many people have been affected and those potentially being underpaid have not yet been contacted by the DWP.
If anyone purchased unnecessary National Insurance top-ups, they will be issued a refund.
HMRC began correcting records in February 2023 and expects this work to be completed by the end of March 2024.
You can check your state pension forecast online to find out how much money you’ll get.
Warning as millions on Universal Credit could miss out on hundreds of pounds
The state pension is separate to any private or workplace pensions you may have.
The NAO said in its report: “Individuals who claimed Universal Credit during the intervening period have credits missing from their National Insurance record.
“Around 10 million people made a claim to Universal Credit during the affected six-year period.
“Unless these people have a National Insurance credit for some other reason, then their National Insurance record will be incorrect.
“If these people use the government’s Check Your State Pension tool, they will see an inaccurate valuation of their state pension.
“There is therefore a risk that some people may have unnecessarily purchased voluntary Class 3 National Insurance contributions to top-up their state pension.
“DWP has not informed potentially affected claimants about these issues.”
Guy Opperman, minister of state at the DWP, said: "The Department has been working with HMRC to resolve this issue.
"We expect NI records will be fully updated by HMRC over the course of 2023/24, any State Pension entitlement will be reassessed, and any underpayment addressed accordingly."
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