Thousands of pensioners in the UK have been underpaid due to errors in their National Insurance (NI) records, leading to lower-than-expected state pensions.
To address this, HM Revenue and Customs (HMRC) has launched the Pension Correction Initiative, ensuring that affected individuals receive the money they are owed.
This issue mainly impacts women in their 60s and 70s who claimed Child Benefit between 1978 and 2000 but didn’t provide their NI number on the application forms.
This mistake caused them to miss out on Home Responsibilities Protection (HRP) credits, which are essential for calculating state pension entitlements.
With the correction process in progress, let’s look at how this happened, who is affected, and what you can do if you believe you are owed money.
Pensions Underpaid
The Mistake
HRP was introduced to help parents and caregivers build up NI credits while taking time off work to look after children or dependents. These credits contribute to state pension eligibility. However, an administrative error meant:
- Between 1978 and 2000, Child Benefit claimants should have received HRP credits.
- If they did not provide their NI number, these credits were not recorded in their pension records.
- When these individuals retired, they received lower pensions than they were entitled to.
This error remained undetected for decades, impacting around 210,000 pensioners, with an average underpayment of £5,000 per person.
How HMRC is Fixing the Issue
To resolve this, HMRC has launched a correction campaign. Here’s what’s happening:
Notification Process
- HMRC is sending letters to affected pensioners, informing them of possible underpayments.
- The Department for Work and Pensions (DWP) started processing these cases in early 2025.
Correction Process
- National Insurance records are being reviewed and updated to include missing HRP credits.
- Once corrections are made, the DWP will adjust pension payments and issue back payments.
How to Check If You Are Owed Money
If you suspect you may have missed HRP credits, follow these steps:
Step 1: Check Your Records
- Log into your Gov.uk account and review your State Pension and NI records.
- If you reached pension age after April 5, 2010, HRP or NI credits should appear as a full qualifying year.
Step 2: Use the Online Tool
- The UK Government provides an Online Tool on Gov.uk to help you check if HRP credits are missing.
Step 3: Call the NI Helpline
- If you reached pension age on or before April 5, 2010, HRP was recorded differently.
- Call the National Insurance Helpline to confirm if credits are missing.
Step 4: Fill Out the CF411 Form
- If your HRP credits are missing, you will need to fill out the CF411 Form to claim missing credits up until March 2010.
Step 5: Receive Back Payments
- Once HMRC verifies your claim, they will update your NI records and issue any back payments owed.
Who Will Benefit?
This correction primarily benefits:
Stay-at-home parents or caregivers who claimed Child Benefit but didn’t submit their NI number.
Individuals who retired with lower pensions due to missing HRP credits.
Pensioners receiving less than expected due to gaps in NI contributions.
How Much Can You Expect?
The amount owed depends on how many years of HRP credits were missing.
| Missing HRP Years | Estimated Back Payment |
|---|---|
| 1-3 years | £1,000 – £3,000 |
| 4-6 years | £3,000 – £6,000 |
| 7-10+ years | £7,000+ |
The average back payment is around £5,000 per person, but some could receive significantly more.
The HMRC Pension Correction Initiative is a crucial step in rectifying pension underpayments that have lasted for decades. If you think you might be affected, check your records, use the online tool, and take action.
Ensuring your National Insurance history is accurate could mean receiving thousands of pounds in back payments and a higher pension for the future.
