HMRC sending 150,000 letters as people could be owed thousands after error

A large number of pensioners are being urged to look out for letters that could entitle them to thousands after an HMRC error underpaid state pension sums to certain people. Roughly 150,000 people are due to receive the correspondence.

Specifically, people who took time off work to care for a child between 1978 and 2010, mostly women who were stay-at-home mums, could be owed backdated state pension payments. These individuals had gaps in their National Insurance record as a result of their absence from work, which in turn affected the amount of state pension they get.

However, the Home Responsibilities Protection system was put in place to help parents avoid this gap by giving them National Insurance credits and those impacted by the error have not received this patch in their NI record. HMRC is prioritising contacting those above state pension age but those under the age of 66 may still get correspondences if their National Insurance record has been impacted by the error.

The historic error was first revealed in 2022 and an estimated 210,000 people had been underpaid but it is understood 60,000 recipients are now dead. The majority of living recipients who may be owed a hefty lump sum in backdated payments can expect to be contacted by HMRC by April next year.

Those who have received a letter already revealing their eligibility may still need to check if they qualify online. Additionally, people who think they may be affected by the error can check their eligibility online by using HMRC’s HRP checker.

In February, the DWP estimated that a total of £1.3 billion is owed to retired parents, roughly equating to an average of £5,000 due to each individual. It also described the mistake as the “second largest” source of errors in state pension.