The government has announced plans to launch an investigation into the issue of ‘mothers missing millions’ in state pensions.
According to DWP data, there are around £1b in unpaid arrears. LCP partner Steve Webb says this matter stems from a discovered error in the National Insurance records of individuals, primarily mothers, who should have received NI credits for their time spent raising children at home.
The DWP emphasises that there is a large degree of uncertainty, indicating that the exact range may be anything between £300m and £1.5b.
The government will launch its outreach programme in the autumn of 2023. This effort will try to find and assist parents who may have been impacted by these differences. Women in their 60s and 70s who applied for Child Benefits prior to May 2000 will be the main focus of the investigation.
According to HMRC, it will be reaching out to people who lack HRP records and have gaps in their NI history between 1978, when HRP was first implemented, and 2010, when it was converted into NI credits.
The NI records will be corrected in cases where inaccuracies are found, and the DWP will then recalculate state pensions and issue the necessary arrears payments.
LCP partner Steve Webb says: “It is good news that the Government is finally taking action to deal with yet more errors in people’s state pension records. Missing out on protection for time at home with children could make a huge difference to a mother’s pension entitlement, and lump sum payments of arrears could run into many thousands of pounds for those who are affected.
“I hope that this correction process will be completed as quickly as possible, as far too many people have been underpaid for far too long.
“The scale of these errors is huge. It is shocking that so many women have been underpaid so much money. This makes it essential that things are put right as a matter of urgency”.
