DWP letter in post means people owed at least £2,000 after HMRC 'mistake'

State pensioners have been urged to check payments as over a BILLION is lost to National Insurance errors. The Department for Work and Pensions ( DWP ) has warned the historic recording of Home Responsibilities Protection (HRP), administered by HMRC, means state pensioners are owed.

More than 97,000 pensioners are being paid arrears worth between £2,000 and £12,000. There are estimates that around 237,000 pensioners have been underpaid, with underpayments totalling £1.46bn, an eye-watering sum amid the Cost of Living crisis.

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown commented: “We tend to assume benefits such as state pension will be paid out automatically at the correct rate, but we’re wrong. State payment overpayments stood at £170million in FYE 2024. However, these were a drop in the ocean compared to the estimated £470million in underpayments over the same period.

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“That’s a lot of people who aren’t receiving the money they are entitled to and for many it’s caused them to struggle financially – it pays to check.” Ms Morrissey added: “The key reason behind errors in state pension payments is inaccuracies around National Insurance records.

“There have been high profile cases of groups who have not received the uplifts they were entitled to under the basic state pension system when their partners died for instance. However, even if you aren’t in this position, it shows the importance of getting a state pension record and checking that the information held for you is correct. Taking the time to do this now could save yourself a nasty shock when it comes to retirement.”

“We have identified and 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," DWP said. “Our priority is ensuring everyone receives the financial support to which they are entitled and HMRC has begun writing to those likely affected by this issue.

“The state pension underpayment rate remains low at 0.4 percent of expenditure.”