State pension warning: 'HMRC issue' could see tens of thousands of pensioners 'miss out on money which is rightfully theirs'
The DWP estimated that £1bn will need to be paid out in arrears to rectify these state pension underpayments
GETTY
Pensioners have been warned they are likely to be missing out on money that is rightfully theirs due to an "HMRC issue", a former Pensions Minister has claimed.
The alert comes as HM Revenue and Customs (HMRC) launches a campaign to rectify missing Home Responsibilities Protection (HRP) for over 180,000 mothers, potentially affecting their state pension entitlement.
Their campaign aims to identify over 180,000 pensioners who have missed out on National Insurance credits for time spent raising children resulting in underpaid state pensions.
The Department for Work and Pensions (DWP) estimates that £1billion will need to be paid out in arrears to rectify these underpayments.
HMRC has written to over a quarter of a million people aged over pension age (currently 66) and another 100,000 under pension age, alerting them to potential entitlements due to system mistakes.
However, Steve Webb, former Pensions Minister and partner at LCP has criticised the Government's internet-based approach to fixing this problem, warning: "HMRC needs to address this issue".
Pensioners are warned they are likely to be missing out on money state pension money that is rightfully theirs
GETTYHe said: "Whilst I understand the desire of Government departments to cut costs, it is completely inappropriate to write letters to hundreds of thousands of pensioners which suggest that the only way to apply is online.
"At the very least, the letters should give recipients a phone number to call or include a paper form for those who are not online."
The problems stems from missing Home Responsibilities Protection (HRP) on National Insurance records, primarily affecting parents who claimed Child Benefit before 2000.
HRP was designed to protect the state pension of those with caring responsibilities between 1978 and 2000.
HMRC is urging women at or nearing state pension age to check for gaps in their National Insurance record because of time taken off. Those affected can potentially top up their state pension free of charge.
The letters sent by HMRC direct recipients to an online self-check for potential eligibility and instruct them to apply online.
No alternative methods of claiming are mentioned in the letter, despite the existence of a simple paper claim form (CF411), Webb explained.
Recipients are told not to apply until they have used an online check for HRP entitlement. This approach has been sent to people of all ages, including some in their nineties.
Webb argued that this method is "wholly unacceptable" given the large numbers of older people who are not online.
Research from Age UK has shown that 29 per cent of people aged 75 or over never use the internet.
Webb warned: "Unless HMRC addresses this issue, it is highly likely that tens of thousands of older pensioners may continue to miss out on money which is rightfully theirs."
He suggested that at the very least, the letters should provide a phone number or include a paper form for those who are not online as expressed older pensioners may lack support from friends or family when getting online.
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James Murray, Exchequer Secretary said: "The State Pension is the foundation of state support for people in retirement. We are urging people to check their National Insurance records to make sure they will receive the pension they deserve."
Emma Reynolds MP, Pensions Minister reinforced the importance of pension security, urging: "The Government's priority is to ensure pensioners have security and dignity in retirement. I strongly encourage anyone who thinks they are missing out to check their eligibility and apply for Home Responsibilities Protection."
HMRC has emphasised that there's no need to wait for notification. Individuals can proactively check their National Insurance record online or through the HMRC app.
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