State Pension error could mean you're owed thousands of pounds

Hundreds of thousands of pensioners could be in line for payouts worth thousands of pounds after a catalogue of errors left them short-changed for years. Blunders in the way National Insurance records were updated mean many people – particularly women who took time out of work to care for children – have been underpaid the State Pension.

The Department for Work and Pensions (DWP) admits that more than 130,000 people have already been identified as receiving too little, with a total of £800million so far earmarked for repayments. But the true bill could exceed £1billion, and officials do not expect the correction exercise to be completed until at least March 2027.

Former pensions minister Sir Steve Webb, now a partner at consultancy LCP, warned: “This is one of the biggest correction exercises in the history of the State Pension. Yet many who are due money will not be aware of it unless they take action.”

Who is affected?

The errors mainly involve Home Responsibilities Protection (HRP) – a system that was supposed to safeguard the pension rights of parents and carers between 1978 and 2010. In many cases, HRP was never credited, leaving huge gaps in National Insurance records.

Other groups affected include:

• Married women who should have seen their pensions rise to 60% of their husband’s entitlement at retirement.
• Widows who were not awarded uplifts following their spouse’s death.
• Over-80s who should be receiving the “category D” top-up, worth up to £85 a week.

According to official figures, the average payout is more than £7,000, though some have received as much as £11,700.

How to check if you are owed

Experts are urging pensioners not to wait for the DWP to make contact. A free online tool created by LCP allows people to check if they might be underpaid by entering their age, marital status and current pension rate. It can be found here.

Those who claimed Child Benefit before 2010 are being encouraged to use a Government portal to apply for HRP to be added to their National Insurance record. It can be found here.

The DWP said it is “committed to correcting errors as quickly as possible” but confirmed the process could take another two years.