Thousands of Pensioners Losing Out on State Pension Payments

A massive error in the UK's State Pension system could leave many older citizens – especially women – without the full amount of money they are entitled to. HM Revenue and Customs (HMRC) has sent over 370,000 letters urging people to check if their State Pension is lower than it should be. These warnings come in response to errors linked to the Home Responsibilities Protection (HRP) scheme, which protected the pension entitlements of carers and parents. If you’re affected, you could be owed thousands in back payments, with the average payout reaching up to £7,859.

Hidden State Pension Errors Affecting Thousands

The issue at the heart of this controversy lies in the HRP scheme, which was introduced in 1978 to ensure that parents and carers didn’t lose their State Pension entitlements. The scheme was supposed to protect the pension rights of people who were caring for children or disabled individuals, but errors in National Insurance records have caused many people to miss out on this protection. Since 2022, the Department for Work and Pensions (DWP) has been investigating this mistake, and the findings have been staggering.

What Went Wrong?

The missing HRP periods primarily affect women, many of whom were responsible for raising children or caring for disabled relatives.
DWP and HMRC discovered that HRP records were not properly updated in National Insurance (NI) records for individuals who were eligible for the scheme.
HMRC is working through an ongoing correction process to identify and compensate affected individuals.

According to the DWP, it’s estimated that between £300 million and £1.5 billion in State Pension payments have been underpaid due to these missing HRP periods. Many of those affected will be entitled to substantial arrears payments.

How HMRC and DWP Are Fixing the Issue

In a bid to resolve the issue, HMRC and the DWP launched a joint initiative called the Legal Entitlements and Administrative Practice (LEAP) corrections exercise. This effort uses National Insurance records to track down people who may have missed out on pension benefits due to missing HRP periods.

The government has provided an online tool at GOV.UK, where individuals can check if their records were impacted. By September 2023, over 493,000 people had already used the tool to verify their HRP status, and a substantial number of back payments have already been issued.

Key Data So Far:

37,289 applications processed from people over State Pension age.
5,428 applications processed from those under 66.
£42 million paid out in arrears.

If you think you might be affected, now is the time to act. The DWP and HMRC have promised that those eligible for corrections will receive their arrears by 2025.

Who is Most Likely to Be Affected?

Though the errors span a long period, those closest to State Pension age, especially individuals in their 60s and 70s, are most likely to be impacted. However, anyone born before 2010 who was caring for children or sick relatives during the period when HRP was active might still be entitled to back payments.

Here are a few examples of who qualifies for this compensation:

Parents who were claiming Child Benefit for children under 16.
Carers who were receiving Income Support while looking after sick or disabled relatives.
Individuals who were foster carers or kinship carers (particularly in Scotland) between 2003-2010.

If you fall into any of these categories, you may be entitled to claim arrears. And even if you’re already at or above the State Pension age, you may still be eligible.

Check Your Eligibility

The good news is that anyone who was affected can check their HRP status using the online tool on the GOV.UK website. This tool asks users a series of questions about their National Insurance records to determine if they are owed any missing HRP contributions. It’s a quick and easy process that could result in a substantial payout.

For those who are eligible, the process is designed to be as smooth as possible:

Eligibility check: Use the online tool to see if you qualify for HRP compensation.
Payment of arrears: Once the check is completed, eligible individuals will receive any back payments owed to them.
Continuing support: Even after the arrears are paid out, people may be entitled to revised ongoing State Pension payments.

How to Check for Missing HRP

Before using the online tool, you’ll need to answer whether there are gaps in your National Insurance record. If you're unsure about your National Insurance record or cannot find certain details, the system allows you to select “Do not know” and provides instructions on how to obtain the required information.

Here’s what the online tool asks for:

Whether you were claiming Child Benefit.
Whether you were caring for a sick or disabled person.
Whether you were a foster carer or a kinship carer in Scotland.

If your National Insurance record is incomplete, or you were not automatically credited with HRP during this period, you could be missing out on substantial payments.

HRP Qualifying Factors

Here are the main categories of people who may be entitled to HRP compensation:

Those who were claiming Child Benefit for a child under 16.
Carers receiving Income Support or caring for a sick or disabled person.
Foster carers and kinship carers who didn’t get National Insurance credits automatically.
Individuals who lived with a partner who claimed Child Benefit during qualifying years (from 1978-2010).

If any of the above situations apply to you, use the online tool today and check your eligibility.

Next Steps and Further Information

To find out if you qualify for any arrears or adjusted State Pension payments, head to the GOV.UK website now. With thousands of people already receiving their back payments, you don’t want to miss out.