Major update for 187,000 women hit by huge pension error – are you owed £1,000s after being underpaid?

A HUGE update has been issued for thousands of women affected by state pension payment errors.

Today, the Department for Work and Pensions (DWP) as well as HMRC have announced plans to repay parents who have been underpaid their state pension for over a decade.

The error, which was first revealed last year, has seen and estimated 187,000 people, miss out on money they are entitled to during retirement - most of them women who were stay-at-home mums.

In an official report published this afternoon the government has revealed that 187,000 people are owed arrears.

While 210,000 were underpaid in total, 43,000 of whom have now passed away.

The DWP estimates that just over £1billion is owed to those affected.

It means the average amount owed is £5,000 each.

Steve Webb, former pensions minister and now partner at LCP, told The Sun: "The scale of these errors is huge.  It is shocking that so many women have been underpaid so much money. 

"This makes it essential that things are put right as a matter of urgency."

Those affected are those who claimed child benefit, largely women, prior to May 2000 as they could have gaps in their National Insurance (NI) record which in turn affects their state pension amount.

The amount of state pension someone gets is based on their NI contributions and the number of "qualifying years" they have.

From 1978 to 2010, a protection for parents to avoid these gaps was provided by a system known as Home Responsibilities Protection (HRP) credits.

This system was then replaced in 2010 by one we have now, called NI credits.

If someone claimed child benefit before May 2000 and did not provide their NI number on the form, it is possible that their credits may not have been transferred to their NI account from the child benefit computer. 

This may affect their pension entitlement and women who are now in their 60s and 70s are most likely to be affected.

When the error was uncovered the DWP described it as the "second largest" source of errors in state pensions.

But at the time it was unclear exactly how many women were affected and no solution was made.

Today, the DWP has announced that from autumn this year, it will begin contacting people who might have been entitled to HRP between 1978 and 2010 but have no HRP on their NI record.

Where errors are found, NI records will be corrected and the DWP will then recalculate state pensions and pay arrears.

This could result in increased pension payments as well as a lump sum payment

Mr Webb previously launched a campaign called Mothers Missing Millions to help the parent's who are missing out on a fortune in state pensions rights because of the error.

He told The Sun: "It is good news that the government is finally taking action to deal with yet more errors in people’s state pension records. 

"Missing out on protection for time at home with children could make a huge difference to a mother’s pension entitlement, and lump sum payments of arrears could run into many thousands of pounds for those who are affected. 

"I hope that this correction process will be completed as quickly as possible, as far too many people have been underpaid for far too long."

The HRP error was first raised over a decade ago and the DWP paid out more than £80million to over 30,000 mothers.

Last year, The Sun spoke to Susan Burton, 66, who almost missed out on £50,000 for her retirement because of this error.