**Thousands of Women Due State Pension Compensation After Decades-Old HMRC Error Uncovered**
Thousands of women across the United Kingdom could be set to receive compensation amounting to nearly £8,000 each, following the discovery of a long-standing administrative error by HM Revenue and Customs (HMRC). The mistake, rooted in the way National Insurance records were compiled between 1978 and 2000, has left many unwittingly underpaid on their state pensions—a situation only now being corrected after decades.
The issue centres on the Home Responsibilities Protection (HRP) scheme, a system introduced to ensure that people—mainly women—who took time away from paid employment to raise children or care for others would not be penalised when it came to the size of their eventual state pension. The HRP was supposed to protect their National Insurance (NI) record, reducing the number of qualifying years required for a full state pension. However, for thousands, this protection was never properly credited onto their NI record.
Affected individuals are largely women who were at home looking after children during the 1980s and 1990s, and who received Child Benefit in their own name. Many of these women have now reached— or are approaching—pension age, only to find their pension payments significantly less than they should be due. The problem was exacerbated when HRP was replaced with National Insurance credits in 2010, which should have continued to offer similar protection but relied on accurate historic records being kept.
Recognising the scale of the mistake, HMRC has now begun contacting those potentially affected. According to officials, around 370,000 people are in line to receive a letter alerting them to possible entitlement. The tax authority’s investigation, which covered the period from January to September 2024, has so far uncovered over 5,300 cases of pension underpayment, totalling an estimated £42 million owed. The average compensation being calculated for each eligible person stands at about £7,859.
Unfortunately, not everyone who lost out on pension payments will be able to benefit directly. It is thought that around 43,000 of those impacted have already passed away. In such cases, the families of the deceased are nonetheless encouraged to come forward and make a claim on behalf of their loved ones, ensuring that the compensation owed finds its way to those entitled.
To qualify, claimants must have received Child Benefit under their own name—not that of a spouse or partner—during the relevant period, and their child must have been under 16 throughout the financial year in question. Additionally, the claimant must not have been participating in the married woman’s ‘reduced stamp’, a lower rate of NI contributions that disqualifies individuals from the protection.
This episode shines a light on the complexities of the UK’s welfare and tax systems, as well as on the long-term impact of administrative missteps. Many of those affected may not have realised their pension was incorrectly calculated, particularly as the intricacies of benefits and entitlements can be challenging to navigate, even for the well-informed.
HMRC has stated that those who have already reached pension age will be prioritised in their outreach. For those unsure of their status, further information and contact details are available on the government website, and organisations such as Citizens Advice stand ready to assist with claims.
The department’s error, while deeply regrettable, brings into sharp relief the importance of regular reviews of both personal benefit records and broader government processes, in order to avoid depriving individuals of their rightful entitlements. Efforts are now being made to ensure similar mistakes do not happen in the future and to support those who have, for decades, been impacted without their knowledge.
Both current and future pensioners are urged to check their own NI contributions and Child Benefit history, as HMRC continues to investigate and resolve outstanding cases arising from this historical oversight.