Urgent Alert: HMRC Error Threatens State Pensions for Self-Employed Workers
Overview
A recent HMRC error is causing concerns among self-employed workers, potentially affecting their state pensions. This blog explains the issue, its impact, and steps you can take to protect your pension.
Background and Cause of HMRC Underpayments
The HRP Issue
The problem stems from errors in Home Responsibilities Protection (HRP). HRP was designed to help people, especially women who took time off to care for children or dependents, earn state pension credits.
The Error Explained
From 1978 to 2000, many people claiming Child Benefit didn’t provide their National Insurance numbers on the forms. This mistake meant HRP credits weren’t properly recorded. When these individuals reached pension age, their records didn’t show the correct HRP credits, resulting in reduced pensions. This error has affected about 210,000 people, mainly women who were stay-at-home parents or caregivers.
Current Efforts and Remediation Steps
HMRC Correction Campaign
HMRC is working to fix these pension underpayments. Affected individuals are receiving letters about potential underpayments and back payments. The Department for Work and Pensions (DWP) began addressing these cases in early 2024.
DWP Pension Schemes Bill
The DWP introduced the Pension Schemes Bill to boost pensions and correct discrepancies. This legislation is part of a broader effort to improve retirement security.
How to Check If You Have Been Underpaid
Review Your Records
Check your State Pension and National Insurance records. For those reaching pension age after April 5, 2010, your record should show HRP credits for full years. Missing credits may indicate underpayments.
Use the Online Checker Tool
The government offers an online tool on the Gov.uk website to help you check if you are eligible for missing HRP credits.
Contact the National Insurance Helpline
For those reaching pension age on or before April 5, 2010, HRP was recorded differently. Contact the National Insurance helpline to check if HRP is included in your record.
Complete Necessary Forms
If you find missing credits, complete the CF411 form to claim any missing HRP credits up to March 2010. This form is available on the Gov.uk website.
What Can You Do Now?
Stay Informed and Proactive
Regularly check your National Insurance records to ensure all contributions are accurately logged. If you see any discrepancies, contact HMRC promptly.
Seek Professional Help
Consult a financial advisor or tax expert for additional guidance and to ensure any issues are resolved effectively.
Conclusion
The HMRC error highlights the importance of monitoring your National Insurance records, especially for self-employed individuals. Stay informed and take proactive steps to protect your state pension and secure your financial future. While HMRC and DWP work to resolve these issues, your vigilance is key to safeguarding your entitlements.
Stay informed, take action, and secure your future.
