Major update for 194,000 women hit by huge state pension error – are you owed £1,000s after being underpaid?

A HUGE update has been issued for tens of thousands of women affected by a state pension error.

Fresh figures have revealed that just under 200,000 retirees have had payments returned after the mistake resulted in £1.15billion being underpaid.

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The error, which was first revealed in 2022, has seen an estimated 194,000 people miss out on money they’re entitled to during retirement – most of them women who were stay-at-home mums.

The annual report by the Department for Work and Pensions (DWP) has been released this week.

It has shown that the process of fixing state pension error is proceeding “at a snails’ pace” according to LCP partner and former pensions minister Steve Webb.

Despite HMRC starting writing out to potential victims last Autumn, the latest report reveals that by the end of March 2024, DWP had assessed just 419 cases.

Just £2.2million in arrears has so far been paid out compared with an estimated final bill of £1.15billion.

The DWP annual report suggests that out of the total number of pensioners missing out around 151,000 are still alive but 43,000 have died.

The DWP report says that work to fix the problem could continue until 2027/28.

Steve Webb 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.”

When the mistake was uncovered the DWP described it as the “second largest” source of errors in state pensions.

Those affected are people who claimed child benefit, largely women who were stay-at-home mums, before May 2000 as they could have gaps in their National Insurance (NI) record which in turn affects the amount of state pension they get.

One of the challenges slowing repayments down is that HMRC has destroyed all its old child benefit records and therefore has to undertake a “fishing expedition” writing out to women potentially affected and encouraging them to make a claim.  

The amount of state pension someone gets is based on their NI contributions and the number of “qualifying years” they have.

From 1978 to 2010, protection was provided for parents to avoid these gaps by a system known as Home Responsibilities Protection (HRP) credits.

This system was then replaced in 2010 by the one we have now, called National Insurance Credits.

If someone claimed child benefit before May 2000 and did not provide their NI number on the form, it’s possible that their credits may not have been transferred to their NI account from the child benefit computer. 

This may affect their pension entitlement and women who are now in their 60s and 70s are most likely to be affected.

The DWP has already started sending letters to thousands of people who might have been entitled to HRP between 1978 and 2010 but have no HRP on their NI record.

It expects to send several hundred thousand letters to those affected over the next 18 months.

However, in some cases, HMRC has written out to very elderly pensioners encouraging them to check their eligibility on a website before submitting a claim or has asked for records and information about children which parents may not have.

Where errors are found, NI records will be corrected and the DWP will then recalculate state pensions and pay arrears.

This could result in increased pension payments as well as a lump sum payment.

Last year, The Sun spoke to Susan Burton, 66, who almost missed out on £50,000 for her retirement because of this error. 

Another woman, 74, has received a £17,000 windfall after falling victim to the error.

It means that finding out if you have been missing out, could mean a big payday.

What do I need to do now?

The DWP says it has begun the process by writing to those already over pension age, but so far has not given any update yet on how many letters they’ve sent or what response they have received.

For the tens of thousands of those affected who have died, it will be a matter of tracking down the families of the deceased.

Mr Webb previously told The Sun: “The scale of this problem is such that it is going to take 18 months to try to track down all those who may have missed out.

“But HMRC’s records give them only very limited information about who to contact, so anyone who thinks they were eligible for Home Responsibilities Protection which may be missing from their state pension should check if they were entitled and put in an application.”

Anyone who has received child benefit since 1978 should check their NI record.

If the payment is missing, there is a form that can be filled in to get the information added to your record.

It is called a CF411 form and it can be found on the government’s website.

You can also contact the HMRC National Insurance helpline for an application form.

Your state pension will then be automatically recalculated and the arrears will be paid.

You can still apply for HRP if, for the full tax years (April to April) between 1978 and 2010, if you were either:

• Sharing the care of a child under 16 with a partner you lived with and they claimed Child Benefit instead of you 
• Caring for a sick or disabled person

Any HRP you had before April 6, 2010, have converted to National Insurance credits.

You must have reached state pension age on or after April 6 for these credits to go towards your pension.

Other state pension error news

The annual report also went into detail regarding a previous error affecting married women, widows and the over 80s, which is due to be completed by the end of 2024.

According to the report, just under 100,000 people (99,558) had received payments by the end of March 2024, with a combined value of £594miilion.

This total included around 44,000 married women, 23,000 widows/widowers and 33,000 over 80s.

Around 700,000 pensioners, are also thought to be affected by the same underpayment error and are set to have their entitlements reviewed.

Many of these women did not receive the entitlement they were due under their husband’s National Insurance records.

Others did not get the uplifts they were eligible for when their husbands died.

That’s what happened to Mary Cunningham, who cared for her husband Harry from 2013, when he began showing signs of dementia, until his death in 2016.

Now Mary, 71, has received a £23,000 windfall after falling victim to the issue.

Elsewhere, the exact amount you need to retire comfortably – including holidays abroad – has been revealed.

Plus, a Martin Lewis fan has revealed how the expert’s little-known tip helped them to boost their state pension by £7,000.

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