Parents who took time out of work in the 1980 and 1990s to care for their children are being urged to check if they have been been receiving the correct state pension.
Stay-at-home parents. mostly women, whose children will now be in their 20s and 30s, are the latest group of people who may have wrongly been underpaid, thanks to a blunder by the Department of Work and Pensions. The errors stem from a failure to take into account changes to the way NI contributions are calculated for stay-at-home parents and some cases, the pay outs could be worth up to £80,000.
In July, a DWP report revealed that around 221,000 people missed out on pension payments because of historic administration errors, with the estimated cost of repaying those affected put at more than £1.3 billion. This was the latest recent scandal to rock the DWP, after an investigation by former pensions minister Steve Webb in 2020 revealed tens of thousands of people — again mainly women — had been hugely underpaid in retirement because of the failure to boost their state pensions in line with what their husbands were owed, according to Thisismoney.
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But the July report also detailed a new error around credits for time spent at home caring for children — known as Home Responsibilities Protection, which were not always recorded accurately on NI records. If you reached state pension age after April 5, 2010, Home Responsibilities Protection (HRP) credits should show as an NI year on your records.
The DWP said this group accounted for the second largest number of underpayments. Sir Steve Webb, now a partner at consultants LCP, says: ‘The DWP has admitted that even more people are being underpaid state pension than previously thought, with a whole new category of errors coming to light. Undoubtedly, this means many thousands have been underpaid for years.’
To qualify for the full new state pension — worth £185.15 a week — you must build up 35 qualifying years of NI contributions. Any years which were ‘contracted out’ in exchange for lower contributions will not be included.
But since 1978, parents have been able to protect their pensions if they have taken time off and receive child benefit. For stay-at-home parents who reached state pension age before April 6, 2010, the DWP was supposed to reduce the number of years of contributions required to qualify for the state pension. Those retiring after this date receive NI credits for each year they were stay-at-home parents. The DWP is working with HMRC to investigate how many people have been caught out, but no update is expected until autumn at the earliest.
A Government spokesman said: "This year we will spend more than £110 billion on the state pension and support over 12.5 million pensioners. We are investigating an issue with the historical recording of Home Responsibilities Protection, with work under way to identify those affected."
Older parents should call the helpline to ask if HRP was added for the years they were not working. If you think you might be affected, ask for a CF411 form or download one here.
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