Warning: Taken time off work to look after kids? You could be owed state pension - here's how to check and claim
If you stayed at home to care for family, as far back as 1978, your National Insurance (NI) record may have been hit with errors that could see you missing out on £1,000s in state pension payments. Below we explain how to check and claim.
The error has been highlighted by Steve Webb, previously the minister of state for pensions. It follows a new report published by the Department for Work and Pensions (DWP) in July, which revealed that this latest problem was the "second largest" source of underpayments in state pensions.
An investigation into the NI records relating to people who reached state pension age between 1978 and 2010 has now been opened. The DWP said numbers affected and amounts owed are not expected to be known before Autumn 2022 at the earliest, though that doesn't stop you from checking and claiming sooner.
As a result of similar corrections in 2011, a share of £83 million was paid to 36,000 people, some of whom also received an average pension increase of £10 a week. Mr Webb also believes some who reached state pension age post-2010 may also be impacted.
This is on top of errors already being corrected that have affected certain married women, widows and the over 80s. To date, £93.4 million has been paid out to 14,200 women. But it is estimated there are around 230,000 married women, widows and divorcees in total who have been underpaid their state pension.
You may be impacted if you cared for family as far back as 1978
Since the 1978/79 financial year, the Government has had a system in place to protect the state pension entitlement of those who aren’t earning through paid work – mainly mothers - because they've instead chosen to raise a family. We explain these systems below.
In both cases, you must not have been paying (or eligible to pay) the reduced 'married woman’s stamp' and the child must have been under the age of 16 (pre-April 2010) or under the age of 12 (post-April 2010) for the whole financial year, meaning the year in which the child turned 16 or 12 won’t count.
- Here's what this means if you reached state pension age between 6 April 1978 and 5 April 2010:
The first iteration of this system, which was in place for those reaching state pension age between 1978 and 2010, was originally called "Home Responsibilities Protection (HRP)". HRP was awarded automatically to those claiming child benefit, or those who'd received income support throughout a tax year while they were caring for a person with a disability or long-term illness. It reduced the number of years required to get a full state pension.
But it appears some carers may not have had HRP credited to reduce the number of years required to receive a full state pension. Mr Webb cites the case of one woman who successfully claimed for 12 years of HRP from 1978/79 to 1989/90, receiving a lump sum of over £4,000, as well as now being entitled to just over £79 a week in state pension. She was previously told she wasn't entitled to any state pension at all.
- Here's what this means if you reached state pension age from 6 April 2010:
For those reaching state pension age since 2010/11, a different system has been in place. Here, caregivers have been able to accrue - or have HRP converted into - NI credits for the years they are out of work due to caring for others. NI credits are important as they count towards the qualifying years - of which you need to gain a set number - before you're entitled to the state pension.
The DWP's report - and its ongoing investigation - doesn't look into cases post-2010, though Mr Webb believes some of these people may also be impacted and may not have received the NI credits due.
How to check if you're owed money - and how to claim for any missing state pension entitlement
The easiest way to check if you’re getting the correct HRP or NI credits is to look at your NI record. You can do this either by checking your state pension or by checking your national insurance record. You can also ring the national insurance helpline on 0300 200 3500, Monday to Friday, 8am to 6pm.
If NI credits are missing or HRP hasn't been correctly awarded, you should try the following:
- If you reached state pension age before 6 April 2010, you need to phone the NI helpline on 0300 200 3500 to check if there is HRP on your record and, if so, for which years. To claim missing HRP up until March 2010, you need to fill in the form CF411.
- If you reached state pension age on or after 6 April 2010, any year where you should have been given HRP or NI credits should be showing as a qualifying year on your NI record. If it’s not, you’ll need to contact HMRC to find out why. To claim missing NI credits since April 2010 you need to fill in CF411a. To claim any missing HRP up until March 2010, you need to fill in form CF411.
As part of your claim, you'll need to provide details of the child or children you looked after. HMRC will then update your NI record if you’re entitled. If you’ve already reached state pension age, DWP will be notified and your state pension should be reassessed with any back-payments paid to you.
On a related note, here's how to check the right person is claiming child benefit
In a separate, but related issue, it's also important to check your child benefit claim is in the right name - otherwise this may also impact your state pension entitlement. According to HMRC, more than 200,000 people are thought to be missing NI credits because child benefit claims are in their partner’s name.
If your partner doesn’t need the NI credits themselves - for example, because they are working and paying NI anyway - you may be able to get the HRP or NI credits transferred to you, provided you reached or will reach state pension age after 5 April 2008. You can do this by filling out this form.
What does the DWP say?
A DWP spokesperson said: "We are investigating an issue with the historical recording of Home Responsibilities Protection, with work under way to identify those affected.”