New State Pension Mistakes Revealed; savers invited to act themselves

The newly identified state pension underpayment issues may not be resolved for “several years”, LCP warned, urging those affected to take action themselves through a new campaign.

The consultancy has launched the campaign to encourage parents who have potentially missed child support payments to check if they are eligible for Family Responsibility Protection (HRP) or National Insurance (NI) credits, and to s ensure this is reflected on their NI record.

The campaign was launched following the Department for Work and Pensions (DWP) annual report of July 2022, in which it identified a new category of error, revealing that the HRP is now the “second largest” source error in public pensions.

The error was uncovered when the DWP undertook its first comprehensive review of state pension fraud and error since 2005-06, which identified some instances where parents should have received credit for the time spent at home with children, but it was not on their NI record.

In its annual report, the DWP confirmed it was working with HMRC to assess the extent of the problem, but the results will not be known until the autumn at the earliest.

LCP suggested that in theory, if the Department for Work and Pensions (DWP) and HMRC agree there is a material error, they can launch a large scale remediation exercise which can detect errors at some point. given.

However, he warned that given that the current correction exercise on state pension errors is due to continue until the end of 2024, there is a risk that these new errors will not be corrected for several years. .

In the meantime, parents “will continue to lose out” on “underpaid” public pensions, which is why, according to LCP, “solving the problem on their own may be the best strategy”.

LCP partner Steve Webb commented: ‘The DWP has admitted that even more people are receiving an underpaid state pension than previously thought, with a whole new category of error which has been revealed.

“Again, this error massively affects women and undoubtedly means many thousands of people have been underpaid for years.

“Rather than waiting for the government to fix the problem, I would encourage anyone who has received Child Benefit since 1978/79 to check that the corresponding credits are on their NI file.

“If not, it can be settled by filling in a form, and the result could well be a higher pension and an attractive capital”.

Issues around underpayment of state pensions were first highlighted by Webb in March 2020, after a Freedom of Information request revealed that “tens of thousands” of women were not receiving the appropriate state pension increases.

The department has since stressed that “many lessons” have been learned from the official underpayment of state pensions, repeatedly pledging to address the issue and apologizing to those affected.

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