A major historical error in the UK pension system has come to light, prompting HM Revenue & Customs (HMRC) to contact hundreds of thousands of women who may have been underpaid their state pensions. At the center of the issue is a failure to properly record Home Responsibilities Protection (HRP), a policy designed to help stay-at-home parents — especially mothers — safeguard their future pension entitlement.
For many affected, the average underpayment is £7,859, with thousands potentially eligible for compensation. If you or a relative claimed Child Benefit between 1978 and 2000, now is the time to check your records and take action.
What Was the HRP Error?
The Home Responsibilities Protection scheme was introduced in 1978 to protect the state pension rights of people — primarily women — who spent time out of the workforce caring for children or dependent relatives.
Here’s where it went wrong:
- HRP was supposed to reduce the number of qualifying years required on your National Insurance (NI) record.
- Between 1978 and 2000, people receiving Child Benefit in their name were supposed to receive HRP credits automatically.
- However, HMRC failed to properly record or transfer these credits when the system changed in 2010, replacing HRP with NI credits.
- As a result, tens of thousands of people were left with gaps in their NI record, leading to lower state pensions.
Who Is Affected?
The underpayments affect women who took time out of paid work to raise children, particularly those who:
- Claimed Child Benefit between 1978 and 2000
- Had it paid in their own name (not their partner’s)
- Had children under age 16 for the full tax year
- Did not pay the married woman’s reduced rate NI stamp (a discounted rate available before 2000)
If these HRP credits weren’t properly logged, your pension entitlement may have been reduced — sometimes dramatically.
How Much Is Owed?
According to government figures, the correction effort is already well underway:
| Time Period Reviewed | Cases Identified | Total Owed | Average Compensation |
|---|---|---|---|
| Jan – Sept 2024 | 5,300+ | £42 million | £7,859 |
Important:
An estimated 43,000 affected women have passed away without receiving what they were owed — but in many cases, their families or estates can still claim the money.
How to Check If You’re Eligible
You may qualify for a back payment if:
- You were the named recipient of Child Benefit between 1978 and 2000
- Your child(ren) were under 16 during the entire tax year
- You did not opt in to pay the reduced rate NI contribution
What You Should Do:
- Wait for a letter: HMRC is sending out more than 370,000 letters through 2024 and 2025.
- Check your NI record: Visit gov.uk/check-national-insurance-record
- Verify your Child Benefit history: You can request this from HMRC if you don’t have it on hand.
- Contact HMRC: If you think you’re eligible but haven’t been contacted yet, call the National Insurance helpline or visit GOV.UK.
What If the Affected Person Has Died?
If a relative or spouse has passed away but was likely underpaid, you may still be able to claim on their behalf. HMRC allows next of kin or estate representatives to apply for compensation. Be prepared to submit:
- A death certificate
- Proof of relationship
- Any relevant Child Benefit or pension records
Government and Expert Response
The scale of the error has triggered strong criticism. Sir Steve Webb, former pensions minister, has been instrumental in exposing the issue. He called the mistake “deeply damaging,” especially because it affected a generation of women who trusted the system to protect their future.
Experts like Rachel Vahey have called this one of the most significant failures in the UK’s state pension system, particularly harming stay-at-home mums and low-income retirees who rely most heavily on the basic pension.
What Happens Next?
HMRC has committed to:
- Prioritising those at or near retirement age
- Sending letters in phases throughout 2024 and 2025
- Correcting NI records to improve future pension payments
- Paying lump-sum back payments to those who were underpaid
If you are eligible, correcting your NI record could not only mean a significant one-time payment, but also boost your ongoing pension income.
FAQs
How do I know if I’m affected?
Check if you were receiving Child Benefit in your own name between 1978 and 2000 and meet the other criteria. HMRC is contacting people directly, but you can also request a check.
Can I apply now if I haven’t received a letter?
Yes, you can contact HMRC to start the process even if you haven’t yet been contacted.
Is this money taxable?
Back payments may affect your income for tax purposes in the year you receive them, but you won’t have to repay any portion of it.