Tens of thousands of people have been affected
The Department for Work and Pensions (DWP) is sending out a second round of letters to people who may have been short-changed on their state pension. Those affected have received on average £8,000 in back pay due to the historical error.
The issue stems from a missing National Insurance credit called Home Responsibilities Protection (HRP). This scheme covered gaps in a person’s National Insurance record, where a person took time out of work to raise children or care for someone with a long-term disability. This historically included many women who took time away from work to look after their children.
Because thousands of eligible people did not have HRP added to their records, their National Insurance contributions were lower than they should have been, potentially reducing their state pension payouts. The DWP has already paid out over £100million in arrears, with those affected receiving an average back payment of £8,000.
Look out for this letter
HMRC and DWP initially wrote to roughly 340,000 people in 2023/2024 who may have been affected. They are now sending a second follow-up letter to around 311,000 of those individuals, to ensure missing credits are claimed.
The department said all letters are “due to be issued by the end of March 2027”. To make claiming simple, the new letter includes a physical paper form so recipients can just fill in their details and mail it back.
Myrtle Lloyd, chief customer officer at HMRC, said: “We’re hopeful that by including the claim form in the letter, people are more likely to fill it in, send it back and find out quickly and easily whether their entitlement will increase on retirement or, if they’ve reached state pension age, they’re owed a payout.”
Check online
More than 25,000 people have already had HRP added to their National Insurance records since the issue was identified. However, officials say they cannot confirm an exact figure for how many people are still owed money.
If your record is missing HRP, it might not change your pension payout if you already have enough qualifying years from paid work to receive the full state pension amount. You do not have to wait for a letter to arrive to see if you are affected.
You can also check if you are affected by the issue using HMRC’s online HRP eligibility checker. If you are missing HRP from your NI record, you can apply for it to be added on the Government website.
