A MAJOR update has been issued on state pension underpayments made due to a Government error.
The error affects some parents who claimed child benefit before 2000 and have gaps in their National Insurance records.
Worried senior woman examining an energy bill she just received through the post.[/caption]
Specifically, it relates to those who should have received Home Responsibilities Protection (HRP) to ensure they got the correct amount of state pension later in life.
HMRC and the Department for Work and Pensions (DWP) is currently in the process of processing claims for anyone affected.
So far, around 119,000 cases have been identified of, largely women, who were underpaid. They have received £735million between them.
But there are still thousands of eligible people who are yet to have responded to letters sent by the Government telling them they could be owed money.
It is understood this is due to the Government requiring further documentation from them.
In a recent update, the Government has revealed when it expects to resolve all these remaining HRP error cases – March 2027.
DWP permanent secretary Peter Schofield wrote to the Work and Pensions Committee (WPC) to provide an update on how many cases were outstanding.
He said: “Customers have up to two years to provide any additional information, so we can expect to clear the small number of remaining cases during 2025-26, and some missed conversions through to the end of 2026-27.
“We are dealing with these cases on receipt and anticipate all cases to be resolved by the end of March 2027.”
He added the DWP will publish data on the total number of cases reviewed following today’s Spring Statement.
Steve Webb, partner at pension consultants LCP, said the majority of the outstanding HRP cases relate to widows where the average repayment is worth around £11,900.
He added: “It has already taken more than four years to fix all of these errors, so it is vital that matters are wrapped up as soon as possible.
“Anyone who has had a letter about errors should make sure they return it with all the relevant information so that any underpayment can finally be put right.”
Who is impacted and what can I do?
Those who claimed Child Benefit, largely women, prior to May 2000 could have gaps in their National Insurance (NI) record and be owed state pension cash.
This is because the amount of state pension you get is based on your NI contributions and number of qualifying years you have.
From 1978 to 2010, protection was provided for parents to avoid these gaps through HRP.
This system was then replaced in 2010 by the NI credits, which is still in operation now.
However, if someone claimed Child Benefit before May 2000 and didn’t put their NI number on the form, their credits may not have been transferred to their NI account from the Child Benefit computer.
The reason only those claiming Child Benefit before May 2000 may be due extra state pension cash is because parents had to include their NI number on their Child Benefit claim after this point.
If you get in touch with HMRC and are found to have been underpaid, your NI records will be corrected and the Government will then recalculate state pensions and pay arrears.
This could result in increased pension payments as well as a lump sum payment.
People can check their eligibility for backdated HRP and make a claim via https://www.gov.uk/guidance/apply-for-home-responsibilities-protection, with HMRC saying the process takes around 15 minutes.
You can also claim by post by filling in a CF411 form which can be downloaded off the link above or call the HMRC helpline on 0300 200 3500/
If the Government thinks you were affected by the HRP error you should have also received a letter.
How does the state pension work?
AT the moment the current state pension is paid to both men and women from age 66 – but it’s due to rise to 67 by 2028 and 68 by 2046.
The state pension is a recurring payment from the government most Brits start getting when they reach State Pension age.
But not everyone gets the same amount, and you are awarded depending on your National Insurance record.
For most pensioners, it forms only part of their retirement income, as they could have other pots from a workplace pension, earning and savings.
The new state pension is based on people’s National Insurance records.
Workers must have 35 qualifying years of National Insurance to get the maximum amount of the new state pension.
You earn National Insurance qualifying years through work, or by getting credits, for instance when you are looking after children and claiming child benefit.
If you have gaps, you can top up your record by paying in voluntary National Insurance contributions.
To get the old, full basic state pension, you will need 30 years of contributions or credits.
You will need at least 10 years on your NI record to get any state pension.
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