HMRC error means thousands of Brits owed nearly £8,000 | Personal Finance | Finance

Thousands of women are being urged to check if they are owed compensation following a historic error that led to widespread underpayments of the state pension.

The issue affects parents, mostly women, who claimed Child Benefit before 2000 and may have gaps in their National Insurance (NI) records, which could reduce their pension entitlement. HM Revenue and Customs (HMRC) is now encouraging those approaching or at state pension age to review their NI records and apply for free top-ups, or check if they’re owed compensation where eligible. The error stems from the former Home Responsibilities Protection (HRP) scheme, which ran from April 6, 1978, to April 5, 2010.

HRP was designed to protect the state pensions of parents and carers by awarding NI credits to those receiving Child Benefit for children under 16 or claiming Income Support while caring for a sick or disabled person.

When HRP was replaced by NI credits in 2010, it was later discovered that some claimants’ HRP entitlements had not been properly recorded. As a result, many who took time out of paid work to raise children or provide care missed out on vital pension contributions.

To receive the full new state pension, people typically need around 35 National Insurance contributions, but this number varies, and some people need more.

HMRC is now contacting those affected by HRP errors, with some individuals owed as much as £7,859.

By September 2024, HMRC said it had written to 257,000 pensioners who could have HRP missing from their NI record. However, as many as 370,000 people are estimated to have been affected overall.

People can check their NI record online or using the free HMRC app. The quickest way to claim missing HRP credits is online, though support is also available by calling the National Insurance helpline on 0300 200 3500.

To apply, individuals must complete form CF411, available on the Government’s website. Once approved, HRP credits can be added retroactively to an NI record, potentially increasing pension entitlements and triggering back payments.

Support is also available through the Department for Work and Pensions (DWP), and applicants may find it helpful to involve a trusted friend or family member in the process.