People on Basic State Pension told to check for payment errors

Independent Age has shared a new State Pension factsheet, offering vital insights for older people who already receive the benefit, which is worth up to £230.25 each week, as well as those approaching retirement age. The informative guide delves into all aspects of the payments, clarifying the distinctions between the New and Basic State Pensions, the right time to claim, options for deferral, how the amount is determined, and potential tax obligations.

Yet, it also addresses historical underpayments, prompting people on the Basic State Pension who might have missed out on National Insurance (NI) 'top-ups' to get in touch with the Pension Service for a recalculation if they suspect errors.

A survey by Independent Age revealed that 41% of over-50s are worried about their post-retirement finances, with nearly half admitting to a lack of understanding regarding their financial prospects, including the State Pension, upon retiring, as reported by the Daily Record.

Guidance from Independent Age reads: "If you qualify for Basic State Pension and can claim State Pension 'top-ups', these are usually calculated for you. But some people - particularly women who paid reduced NI rates - may have had their State Pension miscalculated and underpaid."

"If you think this affects you, contact the Pension Service to ask them to recalculate your State Pension. You can do this whether you're claiming or delaying your State Pension. You can also contact our helpline to arrange to speak to an adviser."

The comprehensive guide to the full State Pension is accessible on the Independent Age website here. Alternatively, you can reach out to them directly by dialling 0800 319 6789.

State Pension historical errors

The Department for Work and Pensions (DWP) has disclosed that a collaborative State Pensions correction initiative with HM Revenue and Customs (HMRC), running from January 8, 2024, to March 31, 2025, unearthed 12,379 cases of State Pension underpayments to women with erroneous National Insurance (NI) records.

In 2022, the DWP detected several State Pension accounts where it seemed historic periods of Home Responsibilities Protection (HRP) were absent, resulting in incorrect State Pension disbursements. To date, approximately £104 million in arrears have been compensated, averaging payments of £8,377 each.

Pension expert Helen Morrissey is calling on seniors to fill out the online form or get in touch with the Pension Service if they suspect they've been impacted. This is following new findings from the DWP which highlight the primary reasons why recipients who have received a letter from HMRC to verify their State Pension – due to potential inaccuracies – haven't responded.

HMRC has dispatched over 370,000 letters, primarily to women, encouraging them to review their State Pension payments as they may be entitled to a higher amount. However, research from the DWP suggests that most people who received a letter did not subsequently apply for HRP.

The barriers included:

• Not understanding the letter
• Thinking the communication was a scam
• Reliance on digital methods to put in a claim

HRP was a scheme established to safeguard the State Pension entitlements of parents and carers, which was superseded by NI credits from 6 April 2010. HMRC is utilising NI records to identify as many people as possible who may have been eligible for HRP between 1978 and 2010 and who do not have HRP on their NI record.

After May 2000, it became compulsory to include a NI number on claims, so those who claimed after this date will not have been affected.

You might still be able to apply for HRP, for full tax years (6 April to 5 April) between 1978 and 2010, if any of the following were true:

• you were claiming Child Benefit for a child under 16
• you were caring for a child with your partner who claimed Child Benefit instead of you
• you were getting Income Support because you were caring for someone who was sick or disabled
• you were caring for a sick or disabled person who was claiming certain benefits

You can also apply if, for a full tax year between 2003 and 2010, you were either:

• a foster carer
• caring for a friend or family member’s child (‘kinship carer’) in Scotland

Who qualified automatically for HRP

The guidance on GOV.UK explains that most people got HRP automatically if they were:

• getting Child Benefit in their name for a child under the age of 16 and they had given the Child Benefit Office their National Insurance number
• getting Income Support and they did not need to register for work because they were caring for someone who was sick or disabled

If your partner claimed Child Benefit instead of you

If you reached State Pension age before April 6, 2008, you cannot transfer HRP. However, you may be able to transfer HRP from a partner you lived with if they claimed Child Benefit while you both cared for a child under 16 and they do not need the HRP.

They can transfer the HRP to you for any ‘qualifying years’ they have on their National Insurance record between April 1978 and April 2010. This will be converted into National Insurance credits.

Married women or widows

You cannot get HRP for any complete tax year if you were a married woman or a widow and:

• you had chosen to pay reduced rate Class 1 National Insurance contributions as an employee (commonly known as the small stamp)
• you had chosen not to pay Class 2 National Insurance contributions when self-employed

If you were caring for a sick or disabled person

You can only claim HRP for the years you spent caring for someone with a long-term illness or disability between April 6, 1978 and April 5, 2002. You must have spent at least 35 hours a week caring for them and they must have been getting one of the following benefits:

• Attendance Allowance
• Disability Living Allowance at the middle or highest rate for personal care
• Constant Attendance Allowance

The benefit must have been paid for 48 weeks of each tax year on or after April 6, 1988 or every week of each tax year before April 6, 1988. You can still apply if you are over State Pension age. You will not usually be paid any increase in State Pension that may have been due for previous years.

If you were getting Carer’s Allowance

You do not need to apply for HRP if you were getting Carer’s Allowance. You’ll automatically get National Insurance credits and would not usually have needed HRP.

If you were a foster carer or caring for a friend or family member’s child

You have to apply for HRP if, for a full tax year between 2003 and 2010, you were either:

• a foster carer
• caring for a friend or family member’s child (‘kinship carer’) in Scotland

All of the following must also be true:

• you were not getting Child Benefit
• you were not in paid work
• you did not earn enough in a tax year for it to count towards the State Pension

If you reached State Pension age on or after 6 April 2010

Any HRP you had for full tax years before April 6, 2010 was automatically converted into National Insurance credits, if you needed them, up to a maximum of 22 qualifying years. A full overview of HRP can be found on GOV.UK here.