A HUGE update has been issued for thousands of women affected by state pension payment errors.
Today, the Department for Work and Pensions (DWP) as well as HMRC have announced plans to repay parents who have been underpaid their state pension for over a decade.
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The error, which was first revealed last year, has seen and estimated 187,000 people, miss out on money they are entitled to during retirement – most of them women who were stay-at-home mums.
In an official report published this afternoon the government has revealed that a total of 187,000 people are owed money.
The DWP estimates that just over £1billion is owed to those affected, 43,000 of who have now passed away.
It means the average amount owed is £5,000 each, but could be far higher for some who are
Steve Webb, former pensions minister and now partner at LCP, told The Sun: “The scale of these errors is huge. It is shocking that so many women have been underpaid so much money.
“This makes it essential that things are put right as a matter of urgency.”
Those affected are those who claimed child benefit, largely women, prior to May 2000 as they could have gaps in their National Insurance (NI) record which in turn affects their state pension amount.
The amount of state pension someone gets is based on their NI contributions and the number of “qualifying years” they have.
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From 1978 to 2010, a protection for parents to avoid these gaps was provided by a system known as Home Responsibilities Protection (HRP) credits.
This system was then replaced in 2010 by one we have now, called NI credits.
If someone claimed child benefit before May 2000 and did not provide their NI number on the form, it is possible that their credits may not have been transferred to their NI account from the child benefit computer.
This may affect their pension entitlement and women who are now in their 60s and 70s are most likely to be affected.
When the error was uncovered the DWP described it as the “second largest” source of errors in state pensions.
But at the time it was unclear exactly how many women were affected and no solution was made.
Today, the DWP has announced that from autumn this year, it will begin contacting people who might have been entitled to HRP between 1978 and 2010 but have no HRP on their NI record.
Where errors are found, NI records will be corrected and the DWP will then recalculate state pensions and pay arrears.
This could result in increased pension payments as well as a lump sum payment
Mr Webb previously launched a campaign called Mothers Missing Millions to help the parent’s who are missing out on a fortune in state pensions rights because of the error.
He told The Sun: “It is good news that the government is finally taking action to deal with yet more errors in people’s state pension records.
“Missing out on protection for time at home with children could make a huge difference to a mother’s pension entitlement, and lump sum payments of arrears could run into many thousands of pounds for those who are affected.
“I hope that this correction process will be completed as quickly as possible, as far too many people have been underpaid for far too long.”
The HRP error was first raised over a decade ago and the DWP paid out more than £80million to over 30,000 mothers.
Last year, The Sun spoke to Susan Burton, 66, who almost missed out on £50,000 for her retirement because of this error.
If you think you might be affected by the error we’ve explained what you can do now.
What do I need to do now?
Mr Webb said anyone who has received child benefit since 1978 should check their NI record.
If the payment is missing, there is a form that can be filled in to get the information added to your record.
It is called a CF411 form and it can be found on the government’s website.
You can also contact the HMRC National Insurance helpline for an application form.
Your state pension will then be automatically recalculated and the arrears will be paid.
You can still apply for HRP if, for the full tax years (April to April) between 1978 and 2010, if you were either:
- Sharing the care of a child under 16 with a partner you lived with and they claimed Child Benefit instead of you
- caring for a sick or disabled person
Any HRP you had before April 6, 2010, have converted to National Insurance credits.
You must have reached State Pension age on or after April 6 for these credits to go towards your pension.
Home Responsibilities Protection (HRP) explained
HRP was a scheme to protect parents’ and carers’ State Pension.
National Insurance credits replaced HRP in 2010.
Most people got HRP automatically if they were getting child benefit in their name for a child under the age of 16 and they had given the child benefit office their National Insurance number.
If you think you may be entitled, but you have questions, the Pension Service can be reached using the gov.uk website or by calling 0800 731 0469.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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