Interactive Investor

Errors mean some Britons missing £4.5K in state pension each year

6th July 2023 14:20

by Alice Guy from interactive investor

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National Insurance errors mean some women could receive £4K less state pension each year and £91K less state pension over 20 years.

The government this morning revealed that deleted data on Child Benefit means that some women have been getting less state pension than they are entitled to as their National Insurance record is incomplete.

The error affects women in their 60s and 70s who were stay-at-home mums, and should have received a National Insurance credit, to give them state pension entitlement for the years they were at home and receiving Child Benefit.

If they claimed Child Benefit before May 2000 and did not provide their National Insurance number on the claim, their National Insurance record may not show the correct number of qualifying years of Home Responsibilities Protection (HRP).

Due to data protection rules, the government have deleted the relevant Child Benefit information after five years, so now do not know which women are affected.

If someone was claiming Child Benefit for 15 years and not working, they could be entitled to an additional 15 years of National Insurance contributions. These 15 years of lost NI credits are potentially worth £4,543 additional state pension per year, or £90,857 over 20 years (not including inflation).

Potential lost state pension

Missed NI credits

1 year

5 years

10 years

15 years

Lost state pension each year





Lost state pension if receive state pension for 20 years





Assumptions: based on new state pension which is currently £10,600 per year.

Alice Guy, Head of Pensions and Savings, interactive investor says: “It’s a tragedy that many women are living in unnecessary poverty due to this latest problem with the state pension. Someone caring for their kids as a stay-at-home mum for 16 years could receive a depressing £4.5K less state pension each year, by missing out on crucial National Insurance credits due to this mistake. These are life-changing amounts and will make a huge impact on someone’s well-being in retirement.

“The state pension is crucially important, especially for many women who are less likely than men to have a private pension income and are more likely to be living in poverty in retirement.

“As a society we’ve decided to support women who take time out to care for their family by counting these years towards their state pension. It’s therefore very sad that these women have been let down by the system and are now more likely to be facing poverty in old age.

“It’s vitally important that the government work hard to contact everyone affected as soon as possible to sort out this mistake. Sadly, many women affected could have died in poverty due to this mistake, with a much lower income than they were entitled to.”

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