The state pension error that could mean you’re owed £8,377 – and how to claim it | Personal Finance | Finance
The state pension error that could mean you’re owed £5,000 – and how to claim it (Image: EXPRESS)
Did you take time off work between 1978 and 2010 to look after children or someone with a long-term disability? Even if this isn’t you, please keep reading – you could help a friend or family member reclaim thousands of pounds in state pension payments. Hundreds of thousands of people are thought to be missing out on significant sums due to incorrect gaps in the National Insurance (NI) records during this period, and we really need to spread the word.
The issue stems from Home Responsibilities Protection (HRP), which was replaced by National Insurance credits in 2010. People received HRP automatically if they claimed Child Benefit for a child under 16, or Income Support because they were caring for a sick or disabled person. However, it has since been discovered that the system failed to accurately record the credits for some claimants after the shift to NI. This means those who are affected are not receiving, or are on track to receive, their correct state pension. HMRC said it’s written to 300,000 people it knows are affected, but around 194,000 remain lost in the system. Because of this, it’s unfortunately down to you to be proactive.
Thousands of people may be unaware they’re receiving the wrong amount of state pension. (Image: Getty)
The average underpayment for those with missing HRP is estimated at around £8,377; however, it could be much higher in some cases. We recently helped one reader secure a higher state pension rate and more than £12,700 in state pension back payments from HMRC due to missing HRP credits between 1978 and 1988.
It must be noted that there is a backlog at the tax office. While HMRC says it has deployed extra staff to help tackle it, some people have been waiting months for any form of acknowledgement. If that has been your experience, please email me with the details.
If you think you could be affected, check your NI record online or through the free HMRC app to see if there are any gaps in the years you were taking time off to care for others. To receive the full new state pension, people typically need around 35 National Insurance contributions, though this varies, and some people need more.
The quickest way to claim any missing HRP credits is through the Government’s website and completing form CF411, though support is also available by calling the National Insurance helpline on 0300 200 3500.
Once approved, these credits can be added retroactively to an NI record, which may increase your state pension entitlement or even trigger a backdated payment. Use HMRC’s tool to check your eligibility here.
DEAL OF THE WEEK
Dads and father figures dining at Prezzo Italian will receive a complimentary pint or bottle of Poretti, or a regular soft drink, between June 18 and June 21 – no code is required. On Father’s Day this Sunday, father figures will also receive a £10 gift voucher (one per table), valid for a future visit.
Get hundreds of pounds for free with a simple switch (Image: Getty)
Get hundreds of pounds for free with a simple switch
Average interest rates on easy access savings accounts among the major high street banks have hit a new low. Removing all restrictions – tiered rates, temporary bonuses and withdrawal penalties – high street banks offer 0.96% on average, according to savings app Spring. Even comparing savings accounts with no restrictions, four of the nine major banks offer just 1%, while three offer a dismal 0.75% on their standard easy access accounts. This is appalling when compared to challenger bank counterparts.
At the time of writing, one of the top rates available is 4.21% AER with Secure Trust Bank, with no bonuses or withdrawal restrictions. To put this into perspective, those with £5,000 in an easy-access account paying 0.75% would receive a staggering £38 in interest after one year. This jumps to £50 if your easy access account pays 1% AER. If you moved that deposit into an account paying 4.21% AER, you’d earn an estimated £217. If you hold £10,000, that 4.21% rate earns you around £433 a year.
And if you’re one of the millions keeping huge sums in your current account, earning nothing, please see this as a sign to move your money. Spring reports that more than one million current accounts with balances over £50,000 are earning no interest. If you moved that £50,000 into an easy-access account paying 4.21%, that deposit would earn a whopping £2,167 after a year if left untouched. This is effectively free money so don’t pass it up. Check moneyfactscompare.co.uk for the top rate savings accounts.
