State pensioners could be missing out on a significant boost to their payments due to a historical error, and retirement experts are urging people to check if they are affected. The Department for Work and Pensions (DWP) is writing to more than 300,000 people who may be impacted.
Hannah Martin, pensions expert and founder of Rich Retiree, has urged people to check if they or a friend or loved one are affected. You may need to put in a claim to correct a historical error on your record, yet there is a danger some claimants will never do this.
'Big risk' people could miss out
Ms Martin said: "There is a big risk that some people who are entitled to missing Home Responsibilities Protection (HRP) will never claim it, which could mean they miss out on thousands of pounds in state pension arrears." This relates to a historical error where HRP was not added to people's National Insurance (NI) record, with thousands of people thought to be affected.
The purpose of HRP was to cover any gaps in your NI record where you were out of work with caring responsibilities, such as caring for a child or another person, helping provide contributions to build up your state pension entitlement.
Who may be affected
Ms Martin spoke about who may be affected: "The main group of people affected is women who took time out of work to raise children between 1978 and 2000."
"It might also impact women who worked part-time, had interrupted employment or spent several years looking after children, as well as women whose partners claimed Child Benefit. Other potential groups include people caring for someone who was sick or disabled and foster carers."
Home Responsibilities Protection (HRP) ran from April 6, 1978 to April 5, 2010. It was replaced by National Insurance credits in April 2010. From May 2000 onwards, you had to include your National Insurance number when claiming the support, so anyone who claimed after then will not be impacted.
£8,300 payouts
If you are missing HRP, you could be owed back payments if you have been underpaid your state pension, as well as an increase in your entitlement. Previous HMRC figures showed the average back payment has been £8,377, but you could get more. You can apply for HRP to be added to your NI record on the Government website.
Ms Martin fears people may misunderstand the rules and think they cannot get this uplift. She said: "There will be people who have already retired on a reduced state pension and assume, wrongly, that their entitlement can't be changed at this point. Other people may be unaware they can claim for a relative who has died. Someone in any one of these groups may not realise they are missing HRP, or that they are able to take action."
DWP letters going out
After the error was identified, the DWP and HMRC started writing to people who may have been affected. More than 25,000 people have had HRP added to their NI record since the issue came to light, with over £100 million in state pension arrears paid out. The Government departments wrote to around 340,000 people in 2023/2024 and a second letter is now going out to some 311,000 of these people. All letters will be sent out by the end of March 2027.
The letter includes a claim form, so you can fill this in with your details and put it straight back in the post. Myrtle Lloyd, HMRC's chief customer officer, said: "We're hopeful that by including the claim form in the letter, people are more likely to fill it in, send it back and find out quickly and easily whether their entitlement will increase on retirement or, if they've reached state pension age, they're owed a payout."
'At risk of losing out'
But Ms Martin fears people will not see these letters or will fail to take action. She said: "Anyone who isn't familiar with managing their finances is potentially at risk of losing out."
"Perhaps they are used to relying on a partner or spouse for finances and paperwork, and don't recognise the significance of the letters, or simply feel too overwhelmed to open them or take action. This can be especially risky if they are already struggling to manage, or are dealing with poor health or bereavement."
Another concern for Ms Martin is that people will be too scared to take action. She said: "Fear is also a big risk factor. Some people won't have access to the internet, or don't feel confident using it, and may not have someone to help them, and others may worry that unexpected letters from HMRC are a scam. There's also a worry that they may end up losing money if they challenge their record."
State pension changes
There are some key changes coming up for the state pension that are worth knowing about. The state pension age is currently increasing, moving up in stages from 66 to 67. This process started in April 2026 and will be completed by April 2028. The age you can access your private pensions will move up from 56 to 57 in April 2028.
A new Pension Tax Allowance is being brought in from April 2027. This is an extra tax-free amount on top of the standard personal allowance, to protect those whose only income is the state pension from paying income tax. It will apply to anyone of state pension age and tapers off as your total income moves above the level of the full new state pension, which will be £13,037 from next April.
The triple lock is being changed - Prime Minister Andy Burnham announced at the Labour Party conference that the triple lock will be adjusted from April 2030. The current policy guarantees payments go up each year in line with the highest of 2.5 per cent, the rise in average earnings or inflation. From 2030, the earnings metric is being removed, but Labour has said that the state pension increase will still keep track with the increase in earnings over time. Plans are in place for the state pension age to increase from 67 to 68 between 2044 and 2046, with discussion of bringing forward this timetable.
