£7859 Pension Payout: The UK government has discovered an error in state pension calculations, affecting thousands of people—mainly women. HMRC has sent letters to 370,000 individuals who may have been underpaid due to missing National Insurance credits, known as Home Responsibilities Protection (HRP).
If you are one of those affected, you could be entitled to an average refund of £7,859. Here’s everything you need to know about this issue and how to check if you are eligible for a refund.
What Is Home Responsibilities Protection (HRP)?
HRP was a system that reduced the number of qualifying years needed to claim a full state pension. It was designed to help parents and carers who took time off work to raise children or care for family members. However, in 2010, HRP was replaced by National Insurance credits.
The problem arose because Child Benefit claim forms before 2000 did not require a National Insurance number. This means that thousands of people may not have had the correct level of HRP applied to their National Insurance records, potentially leading to lower state pensions.
Who Is Most Likely to Be Affected – £7859 Pension Payout?
The individuals most likely impacted by this error include:
- Stay-at-home mums who claimed Child Benefit between 1978 and 2000
- Those who received Child Benefit in their own name (not their spouse’s or partner’s name)
- Individuals who were not paying the “married woman’s reduced stamp”
- Those who reached pension age on or before April 5, 2010
According to HMRC, 370,000 people have been contacted so far, with the Department for Work and Pensions (DWP) refunding an average of £7,859 per person. The government is prioritizing pensioners who are most in need of these payments.
How Much Money Has Been Repaid?
As of September 30, 2024, HMRC identified 5,344 cases of underpayments, totaling approximately £42 million in arrears. However, estimates suggest that 43,000 affected individuals have passed away, but their families can still claim on their behalf.
How to Check If You Have Been Underpaid
If you think you might be affected, here’s how to check:
Step 1: Review Your National Insurance Record
If you reached pension age after April 5, 2010, HRP or National Insurance credits should appear as complete years on your National Insurance record. If they are missing, you may be entitled to a refund.
Step 2: Contact the NI Helpline
For those who reached pension age on or before April 5, 2010, HRP was recorded differently. You will need to call the National Insurance helpline to check if HRP was applied correctly.
Step 3: Use the Government’s Online Checker
The UK Government has launched an online checking tool on the GOV.UK website. This tool allows individuals to quickly check if they are missing HRP on their records.
What Should You Do If You Are Affected?
If you discover that you have been underpaid, take the following steps:
- Gather Relevant Documents – Collect records of your Child Benefit claims, National Insurance statements, and any other supporting paperwork.
- Submit a Claim – Contact HMRC or the DWP to formally request a pension correction.
- Claim on Behalf of Deceased Relatives – If your relative was affected but has passed away, you can still file a claim on their behalf.
This state pension error has impacted thousands of individuals, mainly women who claimed Child Benefit between 1978 and 2000. Many have already received refunds, but thousands more might still be unaware that they are owed money.
If you think you or a deceased relative might be affected, check your National Insurance record and use the government’s online tool to confirm your eligibility. With an average refund of nearly £8,000 per person, it’s worth taking the time to investigate and ensure you receive any money owed to you.
Reference: Link
FAQ
Why has HMRC sent letters about state pension errors?
HMRC has identified that many individuals, particularly women, may have been underpaid due to missing Home Responsibilities Protection (HRP) credits on their National Insurance records. The letters inform them of potential refunds.
Who is eligible for a pension refund?
Individuals who claimed Child Benefit between 1978 and 2000 in their own name (not their spouse’s or partner’s) and were not paying the ‘married woman’s reduced stamp’ may be eligible for a refund.
How can I check if I was underpaid?
You can check your National Insurance record online through the UK Government’s website. If your HRP or National Insurance credits are missing, you may be entitled to a refund. You can also contact the NI helpline for further assistance.
Can families claim on behalf of deceased relatives?
Yes, if a relative who was affected has passed away, their family members can still claim the pension refund on their behalf. It is advised to contact HMRC or the DWP to initiate the claim.
What is the average refund amount?
The Department for Work and Pensions (DWP) has estimated an average refund of £7,859 per affected individual, depending on the missing National Insurance credits.
What should I do if I think I am affected?
If you believe you are affected, check your National Insurance record, use the government’s online checking tool, and contact HMRC or the DWP to verify your pension status and initiate the claim process.
