Personal finance expert Martin Lewis has alerted parents who gave birth between 1978 and 2010 that they may be entitled to significant backdated payments due to an administrative error affecting pension records. On his BBC podcast, Lewis highlighted that many pensioners, particularly women aged 40 to 90, may not have received the financial compensation they deserve for gaps in their National Insurance contributions.
The issue revolves around a program known as Home Responsibilities Protection (HRP), intended to safeguard the pension rights of parents and caregivers who took time off work to raise children or care for disabled individuals during that 32-year period. Lewis explained that those eligible for HRP should have received credits to replace the National Insurance years they missed while not working, which are crucial for calculating a full state pension.
According to Lewis, it is estimated that over 100,000 women may have been affected by this oversight. He shared a poignant example from a listener, Cilla, who reported receiving back payments of £31,674 from HM Revenue and Customs (HMRC) for underpayment of her pension.
Government Efforts to Identify Affected Pensioners
The Department for Work and Pensions (DWP) acknowledges that it may have underpaid pensioners between £300 million and £1.5 billion due to errors in recording HRP. To address this, HMRC is actively utilizing National Insurance records to identify individuals who may qualify for HRP but lack the necessary documentation on their files. The agency has begun sending out letters to potential claimants.
A spokesperson from accounting firm Robson Laidler indicated that many individuals could receive an average of £5,000 in backdated payments. The spokesperson emphasized the importance of checking one’s own National Insurance records, particularly for those who may have had gaps due to child-rearing responsibilities.
Lewis urged listeners to visit gov.uk to verify their projected state pension amounts. If discrepancies are found, especially for the years between 1978 and 2010, individuals should investigate their HRP eligibility.
Importance of Addressing Missing Contributions
HMRC has stated, “We want to help you make sure you receive the right amount of State Pension, so we’re asking you to check if you were eligible for HRP between 1978 and 2010.” The letter recipients will be provided guidance on verifying their eligibility and the process for making claims.
The Exchequer Secretary to the Treasury has stressed the significance of the State Pension as a foundation for retirement support. The government is encouraging individuals to review their National Insurance records and ensure they will receive the pension they deserve.
Robson Laidler representatives noted that there is no time limit for applying for HRP if it has not been awarded. They recommend proactive measures, advising individuals to investigate their own records rather than waiting for communication from HMRC or the DWP.
In conclusion, the potential for substantial payments highlights the need for awareness and action among those who may qualify under these provisions. Those affected are encouraged to check their records and seek the benefits they may rightfully claim.
