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BRANAGANS
Accountancy Services Ltd
01709 327 215 | info@branagans.co.uk
September 2024 | State Pension Errors Affect 194,000 Parents
The Department for Work and Pensions (DWP) is making slow progress in resolving State Pension errors affecting approximately 194,000 parents. These parents are being denied their full State Pension due to incorrect information on their National Insurance records.
The issue stems from the misapplication of Home Responsibilities Protection (HRP), a benefit designed for parents who took time off work to raise children. HRP should be credited for the years these parents were out of the workforce, ensuring they qualify for a full State Pension upon retirement.
During a recent review of National Insurance data aimed at fixing other issues-
HOW DID THIS ERROR HAPPEN?
The problem has arisen because before 2000, many Child Benefit claim forms didn't include a National Insurance number, which is necessary to apply the HRP to the relevant account. The problem has been exacerbated by the fact that HMRC has destroyed old Child Benefit records, so it has to write to the people -
Even though HMRC began writing to potential victims last autumn, by the end of March, DWP had only assessed 419 cases out of the total 194,000 people expected to be affected. This means just £2.2m of State Pension arrears have been paid, with the final bill anticipated to reach around £1.15 billion.
Some very elderly pensioners have been encouraged to check via a website if they are eligible for the HRP to be added, so they can make a claim.
WHY HAVE SO FEW CLAIMS BEEN RESOLVED SO FAR?
Even where a successful claim for additional HRP is established, there is a long process to go through. First when HMRC has received a claim form, it needs to update that person's National Insurance records, and then DWP needs to do a State Pension reassessment. This all takes time and is part of the reason why progress is so slow.
The saddest part of this is that a substantial number of those who missed out on their full State Pension have already died, so the payment would need to go to their estate. The best estimate from the DWP is that 151,000 people affected are still alive, but that 43,000 have already died. Many are now so elderly that there is a real urgency to fix the problem.
Steve Webb partner at LCP and former pensions minister, said: "Once the government realised that nearly 200,000 mothers may have been underpaid their state pension, action should have been taken to fix the problem with much greater urgency, especially as many of those who have lost out are now elderly. Instead, DWP has so far assessed fewer than 500 cases out of that total, and the exercise is proceeding at a snail's pace. When the government talks about continuing the exercise into 2027/28 it is clear that this issue is not getting the priority that it deserves."
WHAT CAN YOU DO IF YOU THINK YOU MIGHT BE AFFECTED?
If you think you might be one of the people affected by this error, you should get in touch with HMRC in the first instance and make your claim. Similarly, if you think one of your relatives may have been affected, but is no longer alive, you should also make a claim -
If you are not sure how to do this, get in touch with your accountant and they will give you the help you need to resolve this issue. In the first instance, you should ask the DWP for a State Pension forecast so you know how many full years of National Insurance contributions you have. You can get this online at Gov.uk. Even if this issue doesn't impact you, you should still get a forecast from the DWP so you know what you will get when you reach State Pension age.
CONTACT US
There are many aspects of the State Pension you need to be aware of. So, if you want to plan properly for your retirement, then please get in touch with us on 01709 327 215 or via email at info@branagans.co.uk.
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