A significant oversight in state pension calculations may entitle individuals to reclaim substantial amounts from the Department for Work and Pensions (DWP). The amount of state pension one receives later in life depends on their National Insurance record. Typically, individuals need 35 years of National Insurance contributions for the full state pension under the new system.
If individuals are unemployed, they may qualify for National Insurance credits, which can fill gaps in their record. However, many people are believed to have missed out on an older form of credits called Home Responsibilities Protection (HRP). HRP reduced the required number of qualifying years for state pension claims on National Insurance records and was replaced in 2010 by National Insurance credits.
HRP was supposed to be automatically applied to those receiving Child Benefit. However, forms submitted before 2000 without a National Insurance number led to incorrect application of HRP. This also affected individuals claiming Income Support while caring for a disabled or long-term ill person.
If your National Insurance record lacks the appropriate level of HRP, it could result in underpayment of the state pension, entitling you to a refund. Individuals who took time off work between 1978 and 2010 to care for a child, family member with a disability, or illness may be impacted, particularly women in their 60s or 70s.
Recent data from HMRC indicates that 370,000 women have been contacted regarding potential underpayments by the DWP. Among those who responded, HMRC identified 5,344 cases of underpayment between January 8 and September 30, 2024, totaling around £42 million.
The amount owed in back payments varies depending on the underpayment duration. The average payout per person, according to DWP figures, is £7,859. Some individuals have received tens of thousands in refunds, such as one individual who reclaimed over £31,000.
If you suspect you are not receiving the full state pension, it is advisable to check your state pension forecast or statement. The new state pension is £230.25 per week, while the old basic state pension is £176.45 per week. If gaps are identified, the next step is to review your National Insurance record using the Government’s online checker tool on GOV.UK.
To claim missing HRP, you can utilize the online service on GOV.UK or complete a form and send it to HMRC. While around 43,000 eligible individuals are deceased, their families can still claim on their behalf.