Are you due a back payment on your pension?

Hundreds of thousands of people could be entitled to back payments on their State Pension due to previous administrative errors.  

With underpayments ranging from a few pounds to more than £100,000, it’s worth checking if you’re missing out – and it might be for reasons you didn’t expect.  

“There are several different situations where you could be entitled to a back payment,” says Becky O’Connor, Director of Public Affairs at PensionBee.  

The underpayments, which primarily are owed to women, range from issues with logging National Insurance contributions to some people not getting uplifts in pension payments at the right time. 

If you think you’re due something, there are various services available to help you assess whether you’re eligible – and it’s important to check whether you’ve missed any important letters too. 

“The Department of Work and Pensions (DWP) is trying to identify those affected but it’s a good idea to take a ‘belt and braces’ approach and do your own investigations,” O’Connor adds.   

Payments for a late partner or parent  

While these underpayments have been under investigation for years, the issue has been in the news again recently after a reply to a freedom of information request submitted by Steve Webb, Partner at consultancy LCP and former Pensions Minister. 

It found that, at the end of July 2024, 1,859 people had not responded to letters regarding a late parent, spouse or civil partner who was found to have been underpaid their State Pension and the DWP needing to make a back payment to their estate. 

To do this, it’s contacting the next of kin or the executor, inviting them to make a claim for the arrears due to the deceased, although the DWP has confirmed there are some cases where it has ‘so far been unable to identify an estate to which to pay the arrears due.’ 

As these letters can arrive out of the blue, Webb isn’t surprised people might not be responding, but he urges anyone who does receive one of these letters to reply as soon as possible.  

“Once the DWP hears from you it will calculate any underpayment that is owed. But if it hears nothing, the Government will keep the money,” he told Saga Money News.  

“If you think you might have received a letter or you believe a late partner or parent could have been underpaid, contact the Pension Service.” 

How did these underpayments come to light?  

The first inkling that there was a major issue with underpayments came back in 2020 when Webb was contacted by many people concerned they weren’t receiving the correct State Pension.  

“We flagged these with the DWP, which accepted there were issues and launched a review to identify underpayments,” he explains.    

Estimates in the initial 2021 investigation suggested that around 134,000 people had been underpaid with the total bill potentially more than £1 billion. This has now been revised to 133,000, with the final bill expected to be £970,000. 

The latest figures from the DWP show that, by the end of March 2024, 99,558 underpayments had been identified and a total of £594m in arrears had been paid. 

Could I be affected by State Pension underpayments? 

Although the DWP is contacting those affected, and aims to complete its review by the end of this year, it’s possible that you could be overlooked so it’s worth checking. Those underpaid fall into three groups: 

• People of pension age legally entitled to a pension uplift when they reached age 80 if they weren’t receiving the basic State Pension, or it was below a set level (currently £101.55 a week in 2024/25) 
• Those who reached State Pension age before 6 April 2016 and are entitled to a pension uplift based on their spouse or civil partner’s National Insurance contributions. 
• Those of pension age who have been widowed and did not automatically inherit State Pension entitlement from their late spouse or civil partner.   

Have any other groups been underpaid?  

Yes. As the DWP focused on sorting out the underpayments identified in its review, HMRC spotted an issue with its child benefit records.  

Anyone who took time out of work to raise a family should have received a National Insurance (NI) credit (that counts towards their State Pension) when they claimed child benefit.

This is known as Home Responsibilities Protection (HRP) – the NI number wasn’t always added to the claim before 2010, and therefore the benefit didn't get connected to HMRC’s records.  

As a result, around 210,000 people could be missing out on up to £1.3bn in pension payments.   

Most of those affected are women and, while many will be in their 60s or 70s now, anyone who took time out to bring up children between 1978 and 2010 could be entitled to a back payment if an error is found.   

Will the Government contact me if I’m affected by HRP?  

In Autumn 2023, HMRC started writing to those affected, inviting them to claim any missing Home Responsibilities Protection. Once any gaps are plugged, the DWP can recalculate State Pension entitlement and pay any arrears.  

While hundreds of thousands of people may be eligible for a back payment, by the end of March 2024 the department had only reviewed 419 cases, having begun in January. Of those, it found that 274 payments were needed, totalling £2.2m - an average of over £8,000. 

However, Webb warns that some people may never receive a letter. “The DWP expects to track down around 187,000 of the 210,000 people affected,” he says, adding that even where someone receives a letter, there are potential barriers to making a claim.  

“The HMRC letters direct people to a website to apply for Home Responsibilities Protection. This might put off anyone who isn’t comfortable using the internet.”  

If this is the case for you, it’s worth talking to a family member or friend, who can help you navigate the system and check whether you might be owed a back payment. 

Money Saving Expert has guidance on how to check if any letter you’ve received regarding HRP is a scam – including the tell-tale signs that you’ve been targeted by a fraudster. 

If I think I might have been underpaid, how do I make sure I get what I’m entitled to? 

With so many different groups affected it’s not always easy to know whether you’re entitled to a back payment.  

“The complexity of the old State Pension rules makes it incredibly difficult to know for sure if you’re entitled to compensation,” says Tom Selby, Director of Public Policy at AJ Bell.  

“It’s incumbent on the DWP to root out those who have missed out on State Pension payments and put them back in the position they should have been in." 

A DWP spokesperson told Saga Money News that it was working to repay people what they are owed: “This Government remains committed to ensuring that historical errors are corrected and our priority is ensuring pensioners get the financial support to which they are entitled.

"As part of the exercise, we will contact the individual to inform them of changes to their State Pension amount and any arrears they will receive. Where money is owed to a deceased customer, we will contact their next of kin or the executor.

"Delays may occur when not all the information we need is provided and we would encourage individuals to respond as soon as possible.” 

However, with the DWP still trying to identify all of those affected, it’s sensible to be proactive and find out whether you could be entitled to a back payment, rather than waiting to hear from the Government. 

Online tools are available to help you work out whether you may be eligible. LCP, for example, has developed one for married women and another for widows and widowers.  

Alternatively, if think you might have missed out on Home Responsibilities Protection, you can check your National Insurance record on the UK Government website, or use its HRP eligibility checker. 

If you believe you’ve missed out, or you just want to be sure, O’Connor from PensionBee recommends contacting the Pension Service by phone or in writing. “If you think you might have been affected, ask them to check your records,” she says.  

“It’s a rainy afternoon job but, if you have any doubts about your State Pension, it’s definitely worth checking you’re being paid the right amount.”