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HMRC Error Leaves Thousands of Parents Owed State Pension Arrears

A review of National Insurance records has revealed £450 million in underpayments, with affected individuals and next of kin eligible for compensation averaging £7,859.

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Overview

  • HMRC has identified over 5,300 cases of state pension underpayments between January and September 2024, totaling £42 million in arrears.
  • The issue stems from errors in recording Home Responsibilities Protection (HRP) credits for stay-at-home parents and carers between 1978 and 2010.
  • Approximately 370,000 individuals are being contacted by HMRC, with letters sent to notify them of potential arrears and guide them on how to claim.
  • Next of kin for around 43,000 deceased individuals affected by the error are also eligible to claim the owed pension arrears.
  • The Department for Work and Pensions (DWP) has reported a total of £450 million in underpayments for the 2024/25 tax year, highlighting systemic flaws in record-keeping.