Letters sent out as people could be owed over £7,000 after error
Letters sent out as people could be owed over £7,000 after error
HMRC is writing to around 370,000 people to inform them of a mistake that could be affecting their state pension, with thousands of individuals owed a significant sum
HMRC has uncovered a historical error that means thousands of women could be due compensation to the tune of £7,859. The error primarily impacted women who gave birth in the 80s and 90s under the Labour Party government's tax department. Consequently, HMRC is now sending letters to these women about their potential entitlement to a significant payout.
The mistake relates to Home Responsibilities Protection (HRP), a scheme aimed at reducing the number of years needed on your National Insurance record to qualify for the full state pension.
Tax experts suggest that those most affected by this oversight are stay-at-home mothers who claimed Child Benefit between 1978 and 2000. For money-saving tips, sign up to our Money newsletter here .
During this time, if you were at home raising children or caring for someone and receiving either Child Benefit or Income Support, you were eligible for HRP.
However, the system was altered in 2010 when HRP was replaced with National Insurance credits.
Unfortunately, for thousands of people, their HRP entitlement wasn't correctly recorded or transferred to their National Insurance record.
This lapse by HMRC, which has now been recognised and is being rectified, means some individuals have gaps in their records, according to Birmingham Live.
What's more worrying is that as a result, they may be receiving less state pension than they're entitled to, or will be in the future.
The tax department has initiated the process of sending letters to roughly 370,000 individuals.
They've pinpointed just over 5,300 instances of underpayment from January to September 2024, amounting to a total debt of around £42 million.
On average, each person is due approximately £7,859. It's projected that about 43,000 of the affected individuals have unfortunately passed away, however, their families are still eligible to claim the owed sum.
HMRC is prioritising those who have reached pensionable age and reaching out to them first.
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To qualify, you must have been receiving child benefit in your own name (not a spouse or partner), your child was under 16 for the entire financial year in question, and you were not contributing to the married woman's 'reduced stamp'.
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