HM Revenue & Customs (HMRC) is set to send out letters to thousands, informing them they may be owed additional money.
The people being written to, many of which will be older women, will be asked if they have information missing from their national insurance (NI) records which could have a direct effect on their state pension. One of the things missing from their records could be home responsibilities protection (HRP).
HRP was set up to help protect parents' and carers' entitlement to state pension - it was replaced by NI credits from April 6, 2010. HMRC will contact those affected throughout the following autumn with those over state pension age being contacted first.
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Meanwhile, the Department for Work released an annual report and accounts which estimated there are “around 187,000 cases who may have an underpayment of state pension and for whom we expect to correct”. However, 43,000 of those are thought to have died, according to DWP documents.
If someone claimed child benefit before May 2000 and did not provide their NI number on the claim, their NI record may not show the correct number of qualifying years of HRP, which could affect their state pension entitlement. According to the government, women in their 60s and 70s are most likely to be affected.
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HMRC is using NI records to identify as many people as possible who could have been entitled to HRP between 1978 and 2010 who don't have it on their record. Sir Steve Webb, a former pensions minister who is now a partner at LCP (Lane Clark & Peacock) said: “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.”
Sir Steve added: “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.”
Tom Selby, head of retirement policy at AJ Bell, said: “The most important thing now is that those who have been underpaid are identified as quickly as possible and put back in the position they should have been.
“Tragically, it is inevitable some will have died before they can receive the compensation they are owed.”
