Martin Lewis's Money Saving Expert (MSE) has issued an urgent alert after a new HMRC blunder came to light, potentially affecting up to 800,000 self-employed workers who may have incorrect gaps in their National Insurance (NI) records, risking thousands of pounds in State Pension underpayments.
HMRC Error Affects Self-Employed Since 2015
MSE explained that the mistake impacts people who became self-employed between 2015 and 2024. When signing up for self-assessment, some individuals failed to also notify HMRC using the specific CWF1 form, leading to incorrect Class 2 NI contributions. 'Most people were given the right amount, but a significant number weren't,' MSE warned.
'The whole State Pension system is incredibly complex, which means even those in charge of it can make huge errors, miss payments and more,' MSE stated. 'Some mistakes are automatically corrected; with others, it's don't ask, don't get. So you need to know to ask. This is big money, we've had some tell us of £50,000+ successes.'
How to Check Your State Pension
MSE advises people to check their State Pension forecast on the gov.uk website to see if they are on track for the full amount. The full State Pension is currently £241.30 a week for those who reached State Pension age after April 5, 2016, and £184.90 for older pensioners. To qualify, individuals typically need around 35 years of NI contributions.
Those with gaps from the last six years can buy missing years or sometimes get them for free. However, MSE notes that buying years is usually most beneficial for those at or approaching State Pension age.
Other Groups at Risk
MSE also highlighted other common errors: parents and grandparents who took time off to care for children between 1978 and 2010 may have missed out on NI credits; women who reached State Pension age before 2016 may have been underpaid due to incorrect boosts based on a spouse's pension; and unpaid carers providing at least 20 hours of care per week may be eligible for free NI credits.
MSE urged everyone to check their NI record and use its Missing State Pension guide to identify potential underpayments. 'This is a brand-new issue that's just come to light this week,' MSE added, stressing the importance of acting quickly.
