Millions of pounds left unclaimed as Government fails to reach eligible women – with many thinking the letters are scams
Only 12,379 of a potential 194,000 mothers hit by underpayments of the state pension have been identified, with millions left unclaimed.
Many are ignoring Government letters because they think they might be scams, experts have warned, whilst others assume they are not eligible.
People build up an entitlement to the state pension through qualifying years – paying national insurance (NI) or collecting credits – but a scheme called Home Responsibilities Protection (HRP) was available between 1978 and 2010, which reduced the number of years needed to qualify.
The Government has identified errors in the recording of HRP on some women’s NI records, which mean that between £520m and £1.22m of state
pension payments were not paid when they should have been.
It has been trying to reach these women, mainly through letters, to get them to claim for the missing periods, which would in some cases entitle them to bigger state pensions.
They could get bigger payments going forwards, and also be paid in arrears for money they had missed out on.
However, the response rate to the letters has been low and only £104m of payments have been made so far, according to a report released on Thursday.
An former pensions minister has said that the fact that so many replies are missing shows the Government’s strategy had been a “failure”.
The Department for Work and Pensions (DWP) commissioned research to try to work out why response rates to its letter campaign had been so low, and found that many thought the letters might be scams.
It also discovered that the Government had adopted “digital first” approach to its application process and that many of the women contacted were elderly with limited ability using the internet.
Other findings were that some people probably thought it was too long ago to put things right, and others did not understand the connection between historic receipt of child benefit and entitlement to HRP, and how this could affect their state pension now.
Steve Webb, partner at pension consultants LCP, and a former pensions minister said: “It is deeply disappointing that efforts to track down mothers being underpaid their state pension have so far failed to reach the vast majority of those who the Government thinks have lost out.
“Writing letters to elderly people which guide them towards a two-stage online process was always going to have a low success rate. People are understandably wary of scams, and expecting them to do their own online eligibility check before submitting an online claim was bound to put many people off.
“Whilst DWP deserve credit for conducting research into the reasons for the failure of the strategy so far, it is vital that efforts are now redoubled to make sure that far more people get the state pension that should have been theirs by right”.
If you think you may be eligible for a greater state pension as a result of the administration issues, you can use the Government checker here.
A Government spokesperson said: “We are determined to help people who have been left out of pocket as a result of historical errors which are no fault of their own.
“That’s why we wrote directly to over 370,000 of those who were potentially affected and launched an online tool to help people check if they needed to claim.
“We carried out an extensive campaign to raise awareness of the issue and will continue regular communications to get people to check their National Insurance record.”
