Personal finance expert Martin Lewis has highlighted a significant issue affecting parents who gave birth between 1978 and 2010. Many may be entitled to backdated pension payments due to administrative errors. Lewis revealed details during his BBC podcast, emphasizing that these payments could amount to tens of thousands of pounds for those impacted.
The issue primarily concerns women aged between 40 and 90, particularly those in their 60s and 70s. According to Lewis, the problem arises from a lack of proper recognition for parents and carers who took time off work to care for children or long-term disabled individuals during the specified period. He explained that these individuals were supposed to receive something called Home Responsibilities Protection (HRP), which would have credited them with National Insurance years necessary for a full state pension.
Lewis cited a specific case, mentioning a woman named Cilla who received £31,674 in back payments from HM Revenue and Customs (HMRC). He noted, “This is an important heads up about a state pension error… You need those National Insurance years to get a full state pension.”
The Department for Work and Pensions (DWP) estimates that pensioners may have been underpaid by between £300 million and £1.5 billion due to these errors. Accounting firm Robson Laidler estimates that individuals could be owed roughly £5,000 in backdated payments on average.
Identifying Eligible Claimants
To address the issue, HMRC is using National Insurance records to identify individuals who may have qualified for HRP but have no HRP recorded on their files. The agency has begun sending out letters to inform people of their potential eligibility. Lewis advised individuals to visit gov.uk to determine if they might qualify for the full state pension.
“If you’re not, you need to check for gaps in your years between 1978 and 2010,” he said. “If those years were when you were not working to look after children or someone with a long-term disability, you may need to research Home Responsibilities Protection, as you could be owed money.”
HMRC confirmed that it would reach out to individuals who may have missing HRP. The letter will provide guidance on checking eligibility and making a claim.
A spokesperson from Robson Laidler remarked, “It is estimated tens of thousands of people are due an average of £5,000 in back payments.” The ongoing campaign by HMRC and DWP aims to ensure that all eligible individuals are aware of their rights and the corrections exercise.
Understanding the Implications
It’s important to note that missing HRP from a National Insurance record does not automatically imply that a state pension calculation is incorrect. However, it could be inaccurate, especially for those who spent significant time out of the workforce raising children.
The Exchequer Secretary to the Treasury has stated, “The state pension is the foundation of state support for people in retirement. We urge people to check their National Insurance records to ensure they will receive the pension they deserve.”
Individuals who claimed Child Benefit before May 2000 may not have provided their National Insurance Number, potentially leading to inaccuracies in their records. However, those who made claims after this date will not be affected.
Robson Laidler emphasized the importance of proactively checking National Insurance records rather than waiting for correspondence from DWP or HMRC. There is no deadline for applying for HRP if it has not been awarded, which could provide a crucial financial lifeline for many eligible individuals.
As awareness of this issue grows, it is vital for those who may qualify to take the necessary steps to ensure they receive the pension benefits they are entitled to.
