HMRC to Correct Pension Underpayments 2024, 200K Seniors to Receive £5,000

The HMRC Pension Correction Initiative is a significant effort by HM Revenue and Customs (HMRC) to resolve pension underpayments impacting around 210,000 individuals, primarily women in their 60s and 70s. These underpayments resulted from errors in transferring Home Responsibilities Protection (HRP) credits to National Insurance (NI) records for individuals who claimed Child Benefit between 1978 and 2000 but did not provide their NI numbers.

This guide outlines the issue’s background, causes, remediation efforts, and how affected individuals can verify eligibility and claim corrections.

HMRC to Correct Pension Underpayments 2024

What is HRP?
HRP was designed to help individuals who took time off work for caregiving maintain their eligibility for a full State Pension by reducing the number of qualifying years required.

Key Details of HRP

• Introduced: 1978
• Purpose: Protect pension rights for caregivers and parents
• Eligibility: Those claiming Child Benefit or caring for dependents
• Effect: Fewer qualifying years needed for a full State Pension

The Issue: Missing HRP Credits

Between 1978 and 2000, many individuals claiming Child Benefit failed to provide their NI numbers, which resulted in the non-recording of HRP credits.

Consequences:

• Incomplete National Insurance records
• Reduced State Pension payments
• Long-term financial impacts, especially for women who were stay-at-home parents or caregivers

Who is Affected?

This issue predominantly impacts women who:

• Claimed Child Benefit between 1978 and 2000
• Omitted their NI numbers on claim forms
• Relied on HRP credits for a full pension

Estimated Impact: 210,000 individuals, with an average underpayment correction of £5,000 per person.

Corrective Measures

HMRC and the Department for Work and Pensions (DWP) are collaborating to resolve the underpayments.

Notification Process:

• Late 2023: Initial letters (brown envelopes) sent to inform affected individuals.
• 2024: DWP began processing corrections.

Correcting NI Records:

• Reviewing records from 1978 to 2010
• Adding missing HRP credits
• Recalculating pensions based on updated records

Steps to Check and Claim Missing HRP Credits

1. Review Your Records:
   • Check State Pension and NI records for missing HRP credits.
   • Missing years may indicate underpayment.
2. Use the Online Checker Tool:
   • Visit Gov.uk and input your details to determine eligibility.
3. Contact the National Insurance Helpline:
   • For those reaching pension age on or before April 5, 2010, HRP credits may be recorded differently.
4. Complete the CF411 Form:
   • Fill out this form to claim missing HRP credits for years before March 2010.

Contact Information:

• National Insurance Helpline and form details are available on Gov.uk.

Why This Initiative Matters

The initiative demonstrates HMRC’s commitment to addressing errors and ensuring fairness in pension administration.

Key Outcomes:

• Financial Restitution: Average back payment of £5,000 per person.
• Corrected Records: Accurate reflection of HRP credits.
• Restored Confidence: Emphasizes accountability in managing pension systems.

FAQs

What caused the underpayments?

Administrative errors in recording HRP credits for Child Benefit claimants without NI numbers.

Who is eligible for corrections?

Those who claimed Child Benefit between 1978 and 2000 and relied on HRP credits for their pensions.

What is the average correction amount?

Approximately £5,000 per individual.

How do I check my eligibility?

Review records, use the Online Checker Tool, or contact the National Insurance Helpline.

How long will corrections take?

DWP began resolving cases in early 2024; timelines vary by case complexity.

Click here to know more.