New state pension error impacting mothers - have you been underpaid?
Thousands of mothers may have been underpaid their state pension by the Department for Work and Pensions (DWP).
The new error relates to a system previously known as ‘Home Responsibilities Protection’ (HRP), which was introduced in 1978 to protect the state pensions of parents or carers before the introduction of National Insurance credits in 2010.
This error is in addition to the six state pension errors uncovered earlier in the year by former pensions minister Steve Webb, and the scandal surrounding groups of women who are underpaid their state pension.
Here, Which? explains the new error, and how to check whether you are receiving the right amount of state pension.
What is the new error?
The new error was identified by the DWP in July, and relates to HRP not being recorded accurately on National Insurance records.
The DWP said this is the second largest source of state pension errors after the current correction exercise.
For those who reached state pension age before 6 April 2010, HRP reduced the number of qualifying years needed to qualify for a basic state pension in instances where someone stayed at home and cared for children for whom they received child benefit, or cared for a person who was sick or disabled.
For those who reached state pension age after 6 April 2010, previously recorded periods of HRP were converted into National Insurance contributions.
The DWP report said errors have occurred where periods of HRP were due, but not recorded accurately on someone’s National Insurance record.
Although the state pension is calculated and administered by the DWP, it uses National Insurance records supplied by HM Revenue and Customs (HMRC).
- Find out more: what is National Insurance?
'Mothers missing millions' campaign
In response to this error, Lane Clark and Peacock (LCP), along with Sir Steve Webb - who is a partner at the firm - launched a campaign called ‘Mothers missing millions’ to raise awareness of the error.
The firm said its dedicated website has had thousands of visits, and as a result is starting to hear from people who have secured a backdated lump sum for payments they missed out on, and will receive higher pension payments going forward.
This includes one case where an elderly widower was able to put in a posthumous claim for his late wife’s missing HRP and received a lump sum of more than £4,000. In another case, a woman received a state pension uplift of £50 a week.
Sir Steve Webb said: ‘While it is satisfying to be able to help individuals get their pension records corrected, what is really needed is concerted government action to fix this problem. But so far we have had ‘radio silence’ from the government.
‘DWP and HMRC have clearly known for many months that there is a problem, and it is now time for them to tell us how many people are affected and, more importantly, how they plan to put things right.’
- Find out more: underpaid state pensioners receive £209m in repayments
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What's being done to fix the error?
The DWP told us it was investigating the scale of the issue with HMRC, who administer NI records.
The analysis has not yet been completed due to the complexity involved in identifying cases, and it doesn’t expect to be able to provide further information until 2023.
A DWP spokesman told Which?: ‘We are already taking swift action to restore missing periods of HRP for people identified through this work, and expect to be able to provide further information shortly.’
- Find out more: how much state pension should I get?
How to check if you're impacted
The DWP said in most cases people in receipt of child benefit between 1978 and 2010 will have had HRP applied automatically to their National Insurance record.
But its early analysis indicates that this did not occur for some people who first claimed child benefit before May 2000.
LCP has set up a website dedicated to explaining the issue, and how to work out if you may be impacted.
If you received child benefit since 1978-79 you should check that the relevant credits are on your NI record.
You can use the government website to check your state pension forecast and your National Insurance record.
- Find out more: National Insurance and your state pension
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How to claim missing HRP credits
To claim missing HRP credits you can fill out a form on the government website.
Use CF411 for HRP up to 2010, and CF411a for NI credits after 2010.
You should include details of your child or children, and HMRC should update your NI records if they are incorrect.
LCP said the DWP should then be notified (if you are of state pension age), and your pension will be reassessed.
Find out more: six state pension errors uncovered - are you owed money?
What about other state pension errors?
Earlier this year, six further state pension errors were uncovered following an FOI by LCP.
And the DWP is currently undertaking an official correction exercise - known as a Legal Entitlements and Administrative Practices (LEAP) process – to correct the official errors where some groups of pensioners were found to have been underpaid their state pension.
In its most recent progress report, the government revealed it had repaid £209m to almost 32,000 pensioners.