State pension errors for mothers - thousands of cases remain unreviewed with underpayments exceeding £500 million

The Department for Work and Pensions (DWP) has come under fire for making snail’s pace progress in addressing the second batch of state pension underpayments due to errors, affecting 200,000 mothers.

The errors relate to inaccuracies in National Insurance records, meaning those who took time off to raise a family and claimed child benefit before 2000 may have missed out on a higher state pension payment.

But, of the 200,000 cases, fewer than 500 have been looked at so far, according to the DWP's annual report. The DWP started checking records in March 2021.

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DWP’s annual report reveals that fixing the problem will continue into 2027/28 - but the slow progress means parents, mostly mothers, could be missing out on thousands of pounds in compensation.

These errors are just one group of many. Other groups also affected by admin errors relate to married women, widows and the over 80s - the pension errors have a combined value of £594 million.

Pensions errors for mothers: who was affected by the underpayments?

This batch of state pension underpayments affects mothers who did not get the ‘home responsibilities protection’ on their National Insurance record. 

The home responsibilities protection was in place to ensure women who took time off to raise a family would have their pension protected with National Insurance credits.

But, it was found that many child benefit claim forms submitted between 1978 and 2000 did not include a National Insurance number, meaning records did not sync.

Steve Webb, a former pension minister and partner at consulting firm LCP, says: “One of the challenges is that HMRC has destroyed all its old child benefit records and therefore has to undertake a ‘fishing expedition’ writing out to women potentially affected and encouraging them to make a claim. 

“However, in some cases, HMRC has written to very elderly pensioners encouraging them to check their eligibility on a website before submitting a claim or has asked for records and information about children, which parents may not have.

“Even when HMRC has identified a potentially eligible woman and has received a claim form in response, it then needs to update NI records and then DWP has to do a state pension reassessment.  This entire process means that only a few hundred mothers who have lost out have so far been paid out.”

Of the estimated 194,000 affected, around 151,000 are still alive, but 43,000 have died.

A government spokesperson told MoneyWeek: “We are correcting an issue related to the historical recording of Home Responsibilities Protection on the National Insurance records for people who first claimed Child Benefit before May 2000.

“Most people’s records will be unaffected, and we have an online tool to help people check whether they need to claim.

“State Pension underpayment rates are very low but where errors do occur, we are committed to fixing them as quickly as possible.”

How to find out of you’re affected by state pension underpayments

If you have been underpaid, the DWP is expected to write to you and send a payment.

But, not everyone will get automatic payments and you may have to find out for yourself. 

If you believe you may have been affected, contact the Pension Service directly. 

You could be owed £1000s, so it is worth checking if you claimed child benefit before 2000.