Women pensioners owed £100m

Thousands of female pensioners could be owed a share of £100 million from the government.

The government has admitted failures going back to 1978 in the HM Revenue & Customs (HMRC) pension system mean many women could be owed a full state pension if they have taken time off work to bring up children.

Some 73,000 women are estimated to be eligible for back payments of £1,400.

The flaw involves the Home Responsibilities Protection (HRP) system which has now cut the number of qualifying years from 39 years to 20.

Furthermore, women who have gaps in their National Insurance record for years between April 1996 and April 2002 are entitled to ‘buy back’ the missing years at a special rate.

Then, any improvements in State Pension are backdated to when women first drew their State Pension and could result in a lump sum pay out.

Pensions reform minister Mike O’Brien said: “Generous rules enable women to boost their pension or to receive a backdated sum – typically about £1,400.

"While making voluntary National Insurance contributions won’t be suitable for everyone, we want to give people the right information to help them make a choice.

“We will get in touch with those women who may be entitled to a lump sum and who were not contacted on a previous occasion.

"Some people won’t even need to hand over any cash upfront to benefit.”

Mike Warburton, senior partner at Grant Thornton, who first identified this problem, said: "It's disappointing that the Department of Work and Pensions refused to accept there was a problem when this issue was raised in May last year.

"With any luck the issue will be identified promptly and the problem rectified so thousands of women can get what they are owed as soon as possible."

The problem stems back to 1978 when HRP was first introduced.

HRP should be given automatically to women, registered foster carers (since April 2003) and some registered carers for sick and disabled persons who, from April 5th 1978, have stopped work to bring up children and who are claiming child benefit.

Women who opted to pay the reduced stamp do not initially qualify for HRP, but will have qualified once they were off work for two years.

Those affected reached the age of 60 between April 6th 1998 and October 24th 2004 and are married to a man who is less than five years older than them.

However, it is down to the women involved to chase up the money owed to them.

"It will be the responsibility of the individual to chase this up as neither HMRC nor the Pension Service will be," Mr Warburton said.

Women aged over 60 or within four months of retirement need to contact the Pension Service on 0845 6060 265, and ask for a request to be put through to your local district and request a BR1 form.

"It is a 16-page document which may be daunting for some people, but it is relatively easy to read. It asks for the National Insurance Number and asks about various benefits that the claimant may have received," said Mr Warburton.

"However, nowhere on the form is there any reference to Home Responsibilities Protection, or anything specifically which might alert someone to the fact that this might be relevant to their State Pension calculation. For this reason you should fill out the form and then query it with the Pension Service."

Mr Warburton went on to advise on receiving the form claimant should ask the Pension Service to check with HMRC to establish whether HRP is available or not. As the current research has shown this may not be happening in many cases so you are entitled to raise any queries you have about your pension entitlement and the Pension Service will investigate on your behalf.

Daniel Barnes