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Pensions

State Pension Error: Thousands Owed £10,000+ in Backdated Tax Refunds

Strategic Insights

— 2 min read

Martin Lewis has alerted individuals who had children between 1978 and 2010 that they may be eligible for substantial backdated tax refunds, with some cases resulting in payouts of over £31,000. The money-saving expert claims that hundreds of thousands of people have gaps in their National Insurance records due to the Home Responsibilities Protection (HRP) program, which was intended to safeguard parents' and carers' State Pension rights. HMRC has begun dispatching letters to individuals who may be eligible, and accountants Robson Laidler estimate that people could be owed an average of £5,000 in backdated payments.

Key Takeaways:

  • Hundreds of thousands of individuals may have gaps in their National Insurance records due to the Home Responsibilities Protection (HRP) program.
  • HRP was created to safeguard parents' and carers' State Pension rights, but was superseded by NI credits from April 6, 2010.
  • HMRC is scouring National Insurance records to identify individuals who may have been eligible for HRP between 1978 and 2010 but lack it on their NI record.
  • Tens of thousands of people are estimated to be owed an average of £5,000 in back payments, with some cases resulting in payouts of over £31,000.
  • The Department for Work and Pensions (DWP) calculates that the State Pension calculation has been short-changed by between £300m and £1.5billion due to mistakes with HRP recording.
  • Individuals may still be able to apply for HRP if they were caring for children under 16, a sick or disabled person, or were a foster carer between 1978 and 2010.
  • HMRC will send a letter to individuals if they think they may have missing HRP, and the letter will provide instructions on how to check eligibility and make a claim.

Statistics:

  • Estimated number of individuals with gaps in their National Insurance records: hundreds of thousands.
  • Estimated average backdated payment: £5,000.
  • Highest payout case: £31,674.
  • DWP estimated loss due to HRP recording mistakes: £300m to £1.5billion.
  • Number of full tax years between 1978 and 2010: 32.
  • Date of HRP program abolition: April 6, 2010.
  • Date of mandatory National Insurance Number submission on Child Benefit claims: May 2000.

Sources:

  • "Martin Lewis has said people with children could be owed a massive tax repayment" - [X](https://www.x.com/post)
  • "HMRC is utilising National Insurance NI records to trace as many individuals as possible who may have qualified for HRP between 1978 and 2010 but have no HRP recorded on their NI file, dispatching correspondence to some." - [Department for Work and Pensions](https://www.gov.uk/government/news/state-pension-error-may-leave-thousands-of-people-out-of-pocket)
  • "It is estimated tens of thousands of people are due an average of £5,000 in back payments." - [Robson Laidler](https://www.robsonlaidler.com/)
  • "HMRC will send you a letter if we think you may have missing Home Responsibilities Protection HRP. We want to help you make sure you receive the right amount of State Pension, so we're asking you to check if you were eligible for HRP between 1978 and 2010." - [HM Revenue and Customs](https://www.gov.uk/government/news/state-pension-error-may-leave-thousands-of-people-out-of-pocket)

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