It could affect your state pension.
With the cost of living crisis showing no signs of slowing down, millions are facing soaring bills, while others are struggling to make ends meet.
On that basis, any extra income is a welcome bonus – and a certain group of the population could soon find that some additional money is coming their way.
HM Revenue & Customs (HMRC) will contact people, many of them older women, to find out if they have information missing from their national insurance (NI) records which could affect their state pension.
Around 187,000 women in their 60s and 70s are likely to be owed money as a result of this – but how can you find out if you’re one of them?
The issue affects mainly stay-at-home mothers who might have claimed Child Benefit before May 2000, as well as those who might have stayed at home as carers.
Those who made a claim without giving a National Insurance number first are most likely to have been affected, as their National Insurance credits may not have been transferred across to them as a result.
How much state pension you receive is based on how much National Insurance you pay – you need to have been putting in contributions for around 35 years to be entitled to the full state pension.
However those who may not have been paying in for some years due to not working – such as those staying at home full-time with children, or caring for sick or disabled people – are instead entitled to National Insurance credits, which were previously known as HRP – Home Responsibilities Protection.
This scheme, which ran from 1978 until 2010 when it was replaced by National Insurance credits, may not have been on the records of everyone who was entitled to it.
Hence, HMRC will begin contacting those affected in autumn 2023 who may have less pension than they are entitled to as a result.
The Department for Work and Pensions estimates there are “around 187,000 cases who may have an underpayment of state pension and for whom we expect to correct”.
Around 43,000 of these people are thought to have died, according to the DWP documents – although their families will be entitled to check their eligibility and claim for any arrears.
HMRC will start contacting those affected from autumn 2023 in phases, in order of how close they are to state pension age. Those over state pension age will be contacted first.
Some people affected may have died and their families will be entitled to check their eligibility and make a claim for any arrears.
The Department for Work and Pensions (DWP) and HMRC are working together to find people affected, with HMRC is using NI records to identify as many people as possible who might have been entitled to HRP between 1978 and 2010 but do not have it on their record.
If you are eligible to claim for arrears, you will receive a letter from them – and you’ll be able to make a claim online.
DWP will then recalculate the state pension entitlement and let you know whether you are due any arrears.
Sir Steve Webb, a former pensions minister who is now a partner at LCP (Lane Clark & Peacock) said: ‘Missing out on protection for time at home with children could make a huge difference to a mother’s pension entitlement, and lump sum payments of arrears could run into many thousands of pounds for those who are affected.
Sir Steve added: “The scale of these errors is huge. It is shocking that so many women have been underpaid so much money. This makes it essential that things are put right as a matter of urgency.”
LCP has previously campaigned to raise awareness of the issue and launched a “mothers missing millions” campaign and website – Mothers Missing Millions – to help those who might have been affected.
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