Around 150,000 Britons are at the centre of a state pension crisis due to underpayments, according to shocking new figures from the Department for Work and Pensions (DWP).
An annual DWP report revealed that around 200,000 mothers have not received their full pension entitlements for years, with experts blaming “slow progress” on the issue.
The problem has its roots in Family Responsibility Protection (HRP), a scheme designed to protect the pensions of parents who work from home, but which was replaced in 2010 by the National Insurance Allowance.
People who applied for child benefit before 2000 did not have to state their National Insurance number, which affected the amount of child benefit they received and meant they received less than they should have.
Despite HMRC writing to people affected by the shortfall, the DWP’s annual report noted it had only assessed 419 cases out of around 194,000.
The total payment is estimated to be around £1.15 billion, but only £2.2 million has been paid so far.
Sir Steve Webb, a former pensions minister and partner at LCP, explained the situation.
He said: “When the government realised that around 200,000 mothers may have been underpaid in state pensions, it should have taken more urgent steps to address the issue, especially given that many of those receiving pensions are elderly.”
“But work is progressing slowly, with DWP assessing fewer than 500 cases of that total so far.”
“While the government has spoken about continuing this work until 2027/28, it is clear that this issue is not being given the priority it deserves.”
Of an estimated 194,000 people who were in low-paid work, only 151,000 are still alive today, according to the DWP.
