Hundreds of thousands of people who procure the state pension could be owed up to £5,000 in underpayments from the DWP, an expert has claimed.
A recent House of Commons Committee report highlighted that significant state pension underpayments are due to missing Home Responsibilities Protection (HRP) data.
According to the report, the Department for Work and Pensions (DWP) identified underpayments in 2021/22 due to gaps in the National Insurance records of people who were historically entitled to the HRP benefit.
The DWP now estimates that 210,000 people may have been underpaid some £1.3billion, “going back decades”.
This is in addition to the underpayment of £1.2billion affecting 165,000 pensioners due to historical errors by DWP that we reported on last year.
According to the report, this could be “potentially” leaving hundreds of thousands of pensioners “out of pocket by an average of £5,000”.
HM Revenue & Customs (HMRC), which administers National Insurance records, said it will be difficult to recognize people who have been impacted because it no longer holds the relevant records.
It reportedly plans to contact people it thinks may be affected and invite them to claim HRP. It will then correct the National Insurance record so the DWP can pay back any missing state pension.
HMRC confirmed that any back payments may be subject to a tax charge, but it has not decided how it will deal with this. It has not yet been confirmed when this issue will be fully corrected.
Pension experts at Spencer Churchill described the findings as a “breach of trust and responsibility” and that the proactive measures are “essential” to hinder such occurences in future.
They said: “The mismanagement of National Insurance records over decades is not just a numerical error, it’s a breach of trust and responsibility. Each of the 210,000 pensioners affected represents an individual story of contributions to our society, and the average sum of £5,000 owed is a testament to their hard work.
“The Department for Work and Pensions must address this error with the urgency it demands.”
For those unsure whether they’ve been affected by this state pension error, Spencer Churchill experts said: “It’s vital to review your National Insurance record and grasp your eligibility, particularly concerning Home Responsibilities Protection (HRP).
“Don’t hesitate to seek professional advice if needed. It’s not just about recovering what’s owed; it’s about safeguarding your rights as a pensioner.”
They added that the DWP must not only rectify these errors but also ensure transparent and effective communication with those affected to “rebuild trust” in the pension system.
Spencer Churchill said: “Pensioners who suspect they might have been affected by the state pension error to take immediate action.
“Review your pension statements, consult with financial advisors if needed, and ensure you claim what you are rightfully owed. Your financial security in retirement is paramount, and it’s crucial to be proactive in these matters.”
articulate.co.uk has contacted the DWP for comment.
