A significant error in state pension calculations may result in owing a substantial sum of money from the Department for Work and Pensions (DWP). The amount of state pension received later in life is tied to one’s National Insurance record. Typically, individuals require 35 years of National Insurance contributions for the full new state pension entitlement.
For those not working, National Insurance credits can bridge gaps in their record. However, concerns arise as many individuals may have missed out on an older form of National Insurance credits called Home Responsibilities Protection (HRP). HRP reduced the required qualifying years on the National Insurance record for claiming the state pension, but it was replaced by National Insurance credits in 2010.
The issue stemmed from Child Benefit claims lacking National Insurance numbers before 2000, leading to HRP not being applied correctly. This oversight also affected individuals on Income Support while caring for a disabled or ill family member.
If your National Insurance record did not reflect the correct HRP level, you might have been underpaid in state pension funds and are owed money. Those who took breaks from work between 1978 and 2010 to care for dependents are likely impacted, with women in their 60s or 70s being the most affected group.
HMRC data reveals that 370,000 women have been notified about potential underpayments by the DWP. Respondents from January 8 to September 30, 2024, identified 5,344 cases of underpayments totaling around £42 million.
The reimbursement amount varies based on the underpayment extent and duration. On average, individuals receive £7,859, but some have reclaimed tens of thousands. For instance, a person named Cilla received over £31,000 in back payments.
If you suspect you are not receiving the full state pension, check your pension forecast or statement. The new state pension is £230.25 weekly, while the old basic state pension is £176.45 per week. If gaps are apparent, review your National Insurance record using the online tool provided by the government.
To claim missing HRP, utilize the online service on GOV.UK or complete a form and mail it to HMRC. Although an estimated 43,000 eligible claimants have passed away, their families can still claim on their behalf.
