How thousands of state pensioners will get their £5,000 in underpayments

HMRC is contacting state pensioners and families who are owed around £5,000 in underpayments after an error with their National Insurance record.

The issue mostly relates to women in their 60s and 70s who may have Home Responsibilities Protection (HRP) missing from their NI record, reports the Daily Record.

The Department for Work and Pensions (DWP) is working with HMRC to identify affected pensioners and estimates that 210,000 people may have been underpaid a total of £1.3 billion.

However, the DWP cannot start to correct these cases until HMRC, which administers both National Insurance and Child Benefit records, corrects the affected NI records.

A DWP state pension correction exercise has identified that 10 million National Insurance records of people claiming Universal Credit have not been updated properly and a small proportion of these (210,000) may have also been underpaid their state pension.

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HRP was a scheme designed to help protect parents’ and carers’ entitlement to the state pension and was replaced by NI Credits from April 6, 2010, the Daily Record reports.

HMRC is using NI records to identify as many people as possible who may have been entitled to HRP between 1978 and 2010 and have no HRP on their NI record.

After May 2000, it became mandatory to include a NI number on claims, which means people claiming after this point will not have been affected.

However, NI records are not available for all those affected as Child Benefit records are deleted five years after the claim ends.

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HMRC will start contacting those affected this month in order of how close they are to state pension age – people over state pension age will be contacted first.

DWP will recalculate the state pension entitlement and let people know whether they are due any arrears.

Some people affected may have died and their families will be entitled to check their eligibility and make a claim for any arrears.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, warns that it may be a “long process”.

She said: “The scale of the state pension underpayments is staggering and has caused many thousands of people unnecessary financial distress.

“People have an expectation that they will receive the correct amount of state pension at the right time and for so many people this has not been the case.

“The identification of Home Responsibilities Protection claimants as another group affected is disappointing.”

A phone call to the pension service is the quickest way to find out if you are eligible for a state pension refund.

The best number to call is 0800 731 0469 but full contact details can be found on the website here.

Commenting on the state pension underpayment exercise earlier this year, 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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