The Department for Work and Pensions (DWP) recently provided new updates on the status of the State Pension Underpayments Legal Entitlements and Administrative Practice (LEAP) exercise and the Home Responsibilities Protection (HRP) corrections exercise, which are being carried out in collaboration with HM Revenue and Customs.
The DWP has already completed the LEAP rectification exercises for married women and those in civil partnerships (category BL) and those over the age of 80 (category D) and verified that “progress remains on track for the ‘widowed’ cases to be completed by the end of 2024”.
Between January 11, 2021 and September 30, 2024, the DWP found 119,050 pensioners who were underpaid during the LEAP exercise, with back payments average £11,905. A similar study by HMRC revealed that between January 8, 2024 and the end of September, a further 5,344 underpayments were detected via the HRP rectification exercise, with claimants due an average of £7,859 in State Pension underpayments.
Below is an update on the status of State Pension underpayments, including who may be impacted and how to check online or by phone.
Reasons for State Pension underpayments
In 2020, the DWP became aware of a number of people whose State Pensions had not been automatically raised as required by law. This spurred the Department to take action and examine the scope of the issue.
There are three broad categories of State Pension underpayments:
- Cases covered by the State Pension Underpayments (LEAP) exercise
- Home Responsibilities Protection (HRP) cases where HRP has not been recorded accurately on National Insurance records
- Cases where National Insurance credits need to be updated for people who were claiming Universal Credit.
State Pension Underpayments – LEAP exercise
The State Pension LEAP is the DWP’s greatest underpayment rectification effort currently underway. It was developed to determine where State Pension underpayments may have happened in relation to the following categories of people:
- Category BL (Cat BL) – People who are married or in a civil partnership who reached State Pension age before April 6, 2016 and should be entitled to a Category BL uplift based on their partner’s National Insurance contributions.
- Missed conversions – People who have been widowed and their State Pension was not increased to include any amounts they are entitled to inherit from their late husband, wife or civil partner.
- Category D (Cat D) – People who reach age 80 and who are getting some Basic State Pension but less than the £85.00 (in 2022-23) and may therefore, subject to satisfying the appropriate residency conditions, be entitled to Cat D State Pension of £101.55 a week (2024/25 weekly rate).
State Pension underpayment progress – September 2024
The number of cases evaluated, arrears detected, and payments paid from January 2021 to September 2024 are provided here.
Married (Cat BL)
- Cases reviewed: 321,142
- Underpayments identified: 45,907
- Average arrears payment: £5,591
- Total amount repaid: £250.6m
Widowed (Cat B)
- Cases reviewed: 445,188
- Underpayments identified: 39,706
- Average arrears payment: £11,905
- Total amount repaid: £417.2m
Over 80 (Cat D)
- Cases reviewed: 90,720
- Underpayments identified: 33,437
- Average arrears payment: £2,202
- Total amount repaid: £68.2m
State Pension underpayments progress – Home Responsibilities Protection
The DWP believes that it underpaid the State Pension by £300 million to £1.5 billion due to HRP recording problems.
HMRC has sent out over 370,000 letters to individuals who may have been underpaid their State Pension owing to missing information on their National Insurance (NI) record. The problem mostly affects women in their 60s and 70s, who may have HRP missing from their NI record.
HRP was a plan aimed to safeguard parents’ and caregivers’ entitlements to the State Pension, and it was replaced by NI credits on April 6, 2010. HMRC is utilizing NI information to identify as many persons as possible who may have been eligible for HRP between 1978 and 2010, but do not have it on their NI record.
After May 2000, it became essential to provide an NI number on claims, thus anybody claiming after that date will not have been impacted. It is believed that tens of thousands of individuals are owed an average of £5,000 in outstanding payments.
HRP underpayments – September 2024
- Underpayments identified: 5,344
- Average arrears payment: £7,859
- Total amount repaid: £42m
Personal representatives are able to claim on behalf of deceased customers. For more information on eligibility and how to claim, visit the dedicated HRP page on GOV.UK here.
How to check if you are affected or make a claim
The basic state pension is valued up to £169.50 per week, whereas the new state pension is worth up to £221.20.
A phone contact to the Pension Service is the easiest approach to determine if you have been underpaid for your State Pension. The best number to call is 0800 731 0469; lines are open 8am to 6pm Monday through Friday; complete contact information may be found on the GOV.UK website here.
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