HM Revenue & Customs (HMRC) is set to contact individuals, particularly older women, to address potential gaps in their National Insurance (NI) records that could impact their state pension.
This proactive measure aims to identify cases where home responsibilities protection (HRP) is missing from the NI records.
HRP was a scheme designed to safeguard the state pension and National Insurance credits for parents and carers, but it was replaced by a new system on April 6, 2010.
Starting in autumn 2023, HMRC will begin contacting those affected in phases, prioritising individuals approaching state pension age, with those already past that age group receiving the first notifications.
In some cases, individuals who may have passed away could have eligible family members who can verify their eligibility and claim any owed arrears.
The Department for Work and Pensions (DWP) is collaborating with HMRC to locate affected individuals and rectify their records to ensure they receive the appropriate amount of state pension, read more here
For individuals who claimed child benefit before May 2000 but did not provide their NI number at the time, their NI records may not accurately reflect the number of qualifying years of HRP.
This discrepancy could affect their entitlement to the state pension.
The government emphasises that women in their 60s and 70s are most likely to be impacted by this issue.
HMRC is leveraging the NI records to identify as many individuals as possible who may have been entitled to HRP between 1978 and 2010 but lack HRP information in their records.
Those who meet the specified criteria will receive correspondence from HMRC to determine their eligibility for claiming. Eligible individuals can conveniently submit their claims online.
Upon receiving claims, the DWP will recalculate the state pension entitlements and communicate any owed arrears to the affected individuals.
Sir Steve Webb, a former pensions minister and current partner at LCP (Lane Clark & Peacock), emphasises the significance of rectifying this issue promptly. He highlights that the absence of HRP could significantly impact a mother’s pension entitlement, and the arrears payments could amount to substantial sums.
LCP has previously campaigned to raise awareness regarding this issue and launched the “mothers missing millions” campaign and website (lcp.uk.com/mothersmissingmillions) to assist individuals in determining if they might be affected.
Tom Selby, head of retirement policy at AJ Bell, underscores the urgency of identifying underpaid individuals and promptly rectifying their situations.
“Unfortunately, it is likely that some individuals entitled to compensation may have passed away before receiving the owed amounts.
It is crucial for those contacted by HMRC to respond promptly and provide the necessary information to ensure accurate state pension entitlements and the potential recovery of any owed arrears.”
The joint efforts of HMRC and the DWP aim to rectify this issue and provide the appropriate support to those affected by the missing HRP in their NI records.