A PENSION warning has been issued to millions missing out on £5,000 each due to errors.
The Parliamentary Accounts Committee (PAC) has published its annual report on the Department for Work and Pensions (DWP).
It has warned that more than 200,000 pensioners have been left "out of pocket" by a total of £1.3billion.
In the report, it said the level of fraud and error in benefit spending "remains unacceptably high".
It also raised its concerns that the DWP does not expect this to return to pre-pandemic levels until 2027–28.
PAC chair Dame Meg Hillier accused the Government department of being "asleep at the switch", with people being left short of what they are owed.
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The committee said it was “very concerned that DWP reports yet another historic underpayment of state pension, which it estimates may have left some 210,000 pensioners out of pocket by a total of £1.3 billion” going back decades.
The error, which was first revealed last year, has seen people miss out on money they are entitled to during retirement – most of whom are women who were stay-at-home mums.
It means the average amount owed is £5,000 each, the committee noted.
This is a separate error from the additional one which has seen £1.2billion underpaid to around 165,000 – mainly widows.
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The report stated that the department must “do more to detect underpayments before they build up and have a significant impact on pensioners and other claimants”.
Dame Meg said: “Many pensioners have been left significantly out of pocket by up to thousands, while DWP has been asleep at the switch.
“These are injustices that may never be corrected for some. We are now in a place where Parliament needs assurance that the state pension is being paid accurately.
“We expect DWP to respond to our report in a timely fashion but, frankly, paying pension accurately is a basic that we expect from DWP and not recommendations that our committee ought to be having to make.”
The 210,000 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.
Although HMRC has recently started a programme of writing to those who have potentially missed out on HRP, very few of those who have missed out have so far received what they're owed.
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
It's likely to take several years to reach all of those affected by the error.
Last year, The Sun spoke to Susan Burton, 66, who almost missed out on £50,000 for her retirement because of this error.
Some £8.2billion has also been overpaid in benefits in the past financial year, according to the watchdog.
The report identified a slight fall in the level of fraud and error, down on the previous year’s "eye-watering £8.6billion".
But it described this as only a small decrease and compared it with the much lower figure of £4.4billion in 2019–20 before the pandemic.
Of the £8.2billion overpaid in the latest financial year, £6.4billion was due to benefit fraud, the committee said.
It added that the DWP now expects the propensity of people attempting to commit fraud in society to increase by 5% each year.
It also reported that the department had said it cannot reduce Universal Credit overpayments to the 6.5% of expenditure that it previously committed to.
The majority of fraud and error continues to be driven by Universal Credit, the report said, which was "overpaid by a staggering 12.8% (£5.5billion) in 2022–23".
The PAC stated that the DWP estimates that 18% of Universal Credit claims, relating to more than 800,000 people, already contain an element of fraud.
The committee acknowledged the department’s plan to tackle such fraud and error, commending the DWP for being more transparent on the issue, including investing a further £895million in counter-fraud and setting an annual savings target.
But the committee says the DWP needs to implement its plan and "demonstrate a meaningful reduction" in the levels of fraud and error.
The DWP said it is "committed" to fixing errors as quickly as possible when they do happen.
A spokesperson said: "Our priority is ensuring everyone receives the financial support they are entitled to, and State Pension underpayment rates due to Official Error remain low at 0.5% of expenditure. Where errors do occur, we are committed to fixing them as quickly as possible.
"At the same time, we are cracking down on fraud with new powers which will root out those who try to steal from the most vulnerable while saving the taxpayer £600 million over the next five years. This comes on top of the billions being saved through our counter-fraud plan and will be targeted at areas where fraud and error is higher such as Universal Credit.
“We are now carefully considering the committee’s report and will respond to its recommendations in due course."
What do I need to do now?
If you think you might be one of the 210,000 affected by HRP error we've explained what you can do now.
Anyone who has received child benefit since 1978 should check their NI record.
If the payment is missing, there is a form that can be filled in to get the information added to your record.
It is called a CF411 form and it can be found on the government's website.
You can also contact the HMRC National Insurance helpline for an application form.
Your state pension will then be automatically recalculated and the arrears will be paid.
You can still apply for HRP if, for the full tax years (April to April) between 1978 and 2010, if you were either:
- Sharing the care of a child under 16 with a partner you lived with and they claimed Child Benefit instead of you
- caring for a sick or disabled person
Any HRP you had before April 6, 2010, have converted to National Insurance credits.
You must have reached State Pension age on or after April 6 for these credits to go towards your pension.
Home Responsibilities Protection (HRP) explained
HRP was a scheme to protect parents' and carers' State Pension.
National Insurance credits replaced HRP in 2010.
Most people got HRP automatically if they were getting child benefit in their name for a child under the age of 16 and they had given the child benefit office their National Insurance number.
If you think you may be entitled, but you have questions, the Pension Service can be reached using the gov.uk website or by calling 0800 731 0469.
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Meanwhile, tens of thousands of pensioners have received a total of £497million after being previously underpaid.
Plus, a mum-of-two has revealed how she gets £6,000 a year in state pension without ever making National Insurance contributions.
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