Urgent HMRC warning for 200,000 why may be affected by pension underpayments

Over 200,000 individuals may not be receiving their full pension due to a miscalculation. As a result, HM Revenue and Customs is currently notifying those affected.

However, it's highly recommended that you check if you are eligible, regardless of whether you have received a letter or not.

On BBC Morning Live, the hosts spoke to finance expert, Fiona Bain, about the letter and what people can expect.

Read more: Four DWP benefits not increasing in June despite widespread boosts for millions

Read more: Martin Lewis issues state pensions alert to anyone born before 1979

I got a letter, is it genuine?

Yes, it's real. The finance expert says not to bin the letter as it "could be key to you getting a bigger state pension.", reports Plymouth Live.

Ms Bain added: "HMRC are currently writing to over 200,000 people about something called Home Responsibilities Protection or HRP. This is mainly an issue that affects women who reach state pension age before April 2016, but not exclusively, it can affect men as well."

The show said it had been contacted by many people asking if the letters are real and Ms Bain clarified: "Yes, these letters are real, so if you get one in the post, don't ignore it. Don't throw it in the bin because it could be key to getting a bigger state pension."

Why are people being owed money?

According to GOV.UK, some individuals may find that their National Insurance records lack Home Responsibilities Protection (HRP), which could impact their State Pension.

The website explains that HRP was a scheme designed to safeguard the State Pension entitlements of parents and carers, but it was replaced by National Insurance credits from April 6, 2010.

The Department for Work and Pensions (DWP) and HM Revenue and Customs (HMRC) are collaborating to identify those affected and rectify their records, ensuring they receive the correct State Pension amount.

Ms Bain stated: "You need to have a certain number of qualifying years on your national insurance record to get the full state pension. To get those qualifying years, you need to be working and earning a certain amount across those years.

"But of course, that's not possible for everyone if they are taking time out to look after someone. So in that case since 2010, you would have automatically had your credits paid when you made a claim for child benefit or income support.

"So that's been the system since 2010. Before 2010, it was a different system, and it revolved around this thing called home Responsibilities Protection HRP. Now the way this worked was that it was kind of similar to what we've had since 2010. It was there to protect your entitlement to the state pension if you had to take time out to look after someone, and the thing with it is that it was meant to fill those gaps in your NI record. But there was a problem.

"So before 2000, if you made a claim for child benefit, you weren't required to put your N I number on the claim form. Now this doesn't sound like a big deal, But what this has meant is that many years down the line for lots of complicated reasons that I won't bore you with basically your HRP entitlement was not registered and logged by the Department for Work and Pensions.

"In this respect, you essentially disappeared from the system. So that's why so many people have been affected."

Who is affected?

The State Pension amount one receives is contingent upon their National Insurance record and the number of 'qualifying years' they possess.

If you've been affected, or if a family member who was affected has passed away, you may be entitled to check eligibility and claim any owed arrears. According to GOV.UK, if Child Benefit was claimed before May 2000 without providing a National Insurance Number, the National Insurance record might not reflect the correct number of qualifying years of HRP.

However, those who first claimed Child Benefit after May 2000 are not affected as it became mandatory to provide a National Insurance Number for Child Benefit claims from that date. Class 3 National Insurance credits for parents and carers (CPC), available from April 6, 2010, have been recorded correctly, as have partial periods of HRP.

What should I do next?

Right now, you don't need to do anything. HMRC will write to people who meet these criteria, inviting them to to find out if they are eligible to claim.

If you are eligible, you can claim online. Once the application is processed, HMRC will update their National Insurance record.