HM Revenue & Customs is urging mothers who raised children during the 1980s and 1990s to check whether they are owed extra state pension by using its free online tool, rather than paying a claims management firm that could take up to 40 per cent of any payout.
An HMRC spokesman said: "We encourage anyone who thinks they're missing Home Responsibilities Protection to check if they're eligible using our online tool. Claiming via Gov.uk is free and means they will keep 100 per cent of what they're owed, without having to pay fees of up to 40 per cent to third parties."
Many older mothers have lost out on large sums of state pension because of holes in their National Insurance records, and HMRC is responsible for contacting those affected. The tax authority has already paid out £100 million in arrears, with the average payment coming to around £8,000.
Some claims companies have been charging up to 40 per cent, around £3,200 on an average payout, for something HMRC says people can do themselves for free in about 15 minutes.
Former Pensions Minister Steve Webb, who is now a partner at the consultancy LCP, said: "The claim form for Home Responsibilities Protection is one of the simplest official forms I have come across. Provided that you know the names and dates of birth of your children and a few other bits of information, you should have no trouble filling it in."
Webb, who is also This is Money's pensions columnist, added: "With the typical successful application from a pensioner generating thousands of pounds in arrears, this is an opportunity not to be missed if you think this could apply to you."
HMRC has been publicising the issue since 2023 through hundreds of thousands of letters, social media posts, radio adverts and other communications. It is urging anyone considering using an agent to claim Home Responsibilities Protection (HRP) on their behalf to consult its guidance first, which explains that claimants should check an agent's website to see what tax services they offer.
Checking an agent's terms
HMRC advises reading an agent's terms and conditions carefully so claimants understand the fees they will pay, the legal contract they may be agreeing to, the service they are signing up for, and whether the agent is meeting HMRC's agent standards. HMRC has a range of powers to deal with agents that fail to meet those standards, and when it receives high volumes of claims through agents this can lead to longer processing times.
To find out whether they are owed state pension because of an HRP error, claimants need to supply the names and dates of birth of all their children, along with details of the other parent. Any surviving child benefit paperwork can help, but a claim can succeed without it.
Webb said: "The Government has previously admitted that there are probably tens of thousands of parents who should have been awarded HRP and have missed out, and has so far paid out over £100million in state pension arrears where this has subsequently been corrected."
What is Home Responsibilities Protection?
Home Responsibilities Protection was introduced in 1978/79 to protect the pension record of parents, mostly mothers, who could not make National Insurance contributions because they were looking after a child, Webb explained. Under the original rules, a parent could get HRP for any complete financial year in which they received child benefit for a child under 16 for the whole year.
From 2010/11 the upper age limit dropped from 16 to 12. Parents could not get HRP for any year in which they were paying, or were eligible to pay, the reduced "married woman's stamp" rate of National Insurance.
Women who reached pension age before 2010 needed 39 years of National Insurance contributions to qualify for a full basic state pension, but each year of HRP knocked one year off that target. Someone with nine years of HRP, for example, would need only 30 qualifying years rather than 39.
In April 2010 the rules changed again, and for those retiring after that point, all pre-2010 HRP years were converted into full qualifying years, counting the same as years spent in paid work paying National Insurance contributions. The system is now known as NI credits rather than HRP, and women who reached pension age from April 2010 onwards see these years as full qualifying years on their record.
Who has been affected
Some parents now in their 60s and 70s who claimed child benefit between 1978 and 2000 have been affected by the error. Where they have since died, their beneficiaries are in line for payouts.
The mistake happened because it was not compulsory to include National Insurance numbers on child benefit claim forms until 2000, so some parents' entitlement to state pension protection was never recorded. Child benefit records are deleted five years after a claim ends for data protection reasons, meaning it is now impossible to identify everyone whose record is wrongly missing HRP.
HMRC has searched through National Insurance records to find as many people as possible who have no HRP but might nevertheless have been entitled to it, and has written to those it believes may have been affected.
How to make a claim
If someone makes a claim and an error is found, HMRC will update their National Insurance record and the Department for Work and Pensions will recalculate their state pension and confirm any arrears due. Some backpayments are modest, HMRC said, but others run to tens of thousands of pounds.
If a person suspects a deceased relative was underpaid, a representative such as an executor, administrator or next of kin can make a claim on their behalf, either online or by post. Claimants can also call the National Insurance Helpline on 0300 200 3500, with extra support available for those who need it.
