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, only 12,000 have been paid arrears according to the latest data from the DWP, which started started checking records back in March 2021.
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The DWP said that fixing the problem is likely to continue into 2027/28 - but the slow progress means parents, mostly mothers, could be missing out on thousands of pounds in compensation.
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Steve Webb, partner at pension consultants LCP and a former pensions minister, said: “It is deeply disappointing that efforts to track down mothers being underpaid their state pension have so far failed to reach the vast majority of those who the government thinks have lost out."
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.
Pension 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 (HRP) on their National Insurance record.
The HRP 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.
"One of the challenges is that HMRC has destroyed all its old child benefit records and therefore has to undertake a ‘fishing expedition’ writing to women potentially affected and encouraging them to make a claim," Webb said.
But 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.
"Writing letters to elderly people which guide them towards a two-stage online process was always going to have a low success rate. People are understandably wary of scams, and expecting them to do their own online eligibility check before submitting an online claim was bound to put many people off," said Webb.
"Whilst DWP deserves credit for conducting research into the reasons for the failure of the strategy so far, it is vital that efforts are now redoubled to make sure that far more people get the state pension that should have been theirs by right”.
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 process means that only 12,000 mothers who have lost out have so far been paid out since the process started five years ago.
Of the estimated 194,000 affected, around 151,000 are still alive, but 43,000 have died.
A government spokesperson told MoneyWeek previously: “We are correcting an issue related to the historical recording of HRP 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. You can check using Pension Service directly.
You could be owed £1000s, so it is worth checking if you claimed child benefit before 2000.
