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State Pension Underpayment: Potential £1bn Loss for Mothers

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Mothers May Have Missed Out on £1bn in State Pension

Mothers in the UK might have been underpaid around £1bn in state pension due to missing information in their national insurance (NI) records. The system has included credits for parents who took breaks from employment to raise children since 1978.

Government Campaign to Correct the Issue

The government is launching a campaign to address the underpayment issue by sending letters to potentially affected individuals. Families of deceased individuals will also have the opportunity to check eligibility and claim any arrears.

Uncertainty Surrounding the Underpayment Amount

The estimated amount of underpayment ranges from £300 million to £1.5 billion, as per various assessments. The Department for Work and Pensions (DWP) approximates that approximately £1 billion is owed to approximately 210,000 individuals, which includes 43,000 individuals who are no longer alive. The average shortfall per person is approximately £5,000.

Impact on Women in Their 60s and 70s

Women in their 60s and 70s are most likely to be affected by the underpayment issue, according to the government. Given the significance of state pension for women, who often have lower private pension income and are more vulnerable to retirement poverty, rectifying the underpayment becomes crucial.

Identification and Application Process

HM Revenue and Customs (HMRC) is utilizing NI records to identify individuals entitled to home responsibilities protection (HRP) credits between 1978 and 2010 but lacking HRP credits on their NI record. Eligible individuals will receive letters from the autumn, allowing them to check eligibility and apply online for any entitled arrears.

Commitment to Correct Errors

The government strongly affirms its dedication to guaranteeing that every individual receives the financial assistance they are rightfully eligible for.

A new online tool will be launched to help individuals determine if they need to make a claim, and HMRC will commence writing to potentially affected individuals. State pension underpayment rates due to official error remain low, and the government aims to rectify any errors promptly.


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