State pension errors – why tens of thousands of mothers could be missing out on millions in state pension payments

LCP launches Mothers Missing Millions campaign amid DWP state pension errors.

A state pensions error identified by the Department for Work and Pensions means thousands of mothers could be missing out on millions in retirement money. 

Described by DWP itself as the “second largest” source of error in state pension payments, Steve Webb, the former pensions minister and now partner at consulting firm LCP, has called on the government to end the radio silence over these errors which could have left thousands of women with a significant shortfall in their pension.

The errors were identified in a DWP annual report in July 2022, which found new errors relating to a system previously known as Home Responsibilities Protection (HRP).

Essentially, the system was put in place in 1978 to protect National Insurance contributions for those who could not pay if they stopped working to bring up their family - this would have mainly been women. Without it they would have missed out on valuable pension benefits. 

“However, there have in the past been concerns that some people – mostly mothers – were not getting this protection because of problems getting data from the Child Benefit computer onto the National Insurance computer,” LCP states.

The DWP has said it was working with HMRC to assess the scale of the error – but to date, no official statement has been made outlining the scale of the problem and indeed what it is doing to rectify it.

A government spokesperson told MoneyWeek: “We are investigating an issue with the historical recording of Home Responsibilities Protection, with work under way to identify those affected. We are already taking swift action to restore missing periods of HRP for people identified through this work and expect to be able to provide further information shortly.” 

Steve Webb

Steve Webb

© Matt Cardy/Getty Images

State pensions: how to check if you are affected by the error

LCP has today launched a campaign – Mothers Missing Millions – which also includes a website where you can check if you are potentially affected. 

Steve Webb said: “The site has already had tens of thousands of visits and the firm is now starting to hear from people who have successfully secured a higher pension and a backdated lump sum as a result of the campaign.”

Some payments have been as much as £4,000.

“There is no doubt in my mind that many thousands of mothers have been underpaid state pensions, including some who are now no longer with us. The errors arise from a failure to correctly reflect the protection which is built into the system for time spent bringing up children. Yet again, a state pension error has been unearthed which disproportionately affects women.  

“Whilst it is satisfying to be able to help individuals get their pension records corrected, what is really needed is concerted government action to fix this problem. But so far we have had ‘radio silence’ from the Government. DWP and HMRC have clearly known for many months that there is a problem and it is now time for them to tell us how many people are affected and, more importantly, how they plan to put things right.”

We'll keep this story updated when we get more information - you can sign up to our newsletter for updates. 

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