HMRC Pension Correction 2025 – Nearly 200,000 Seniors to Receive £5,000 in Underpaid Benefits Soon

Thousands of pensioners in the UK have been underpaid their state pensions due to errors in their National Insurance records. In response, HM Revenue and Customs (HMRC) launched the Pension Correction Initiative to correct these underpayments, ensuring affected individuals receive the money they are entitled to.

This issue primarily affects women in their 60s and 70s who claimed Child Benefit between 1978 and 2000 but didn’t provide their National Insurance (NI) number on the forms. This resulted in missing Home Responsibilities Protection (HRP) credits, which are essential for calculating state pension entitlements.

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With the correction process underway, let’s break down how this happened, who is affected, and what you can do if you suspect you are owed money.

Pensions Underpaid

The Home Responsibilities Protection (HRP) scheme was introduced to help parents and caregivers build up NI credits while taking time off work to care for children or dependents. These credits count towards state pension eligibility.

The Mistake:

• Between 1978 and 2000, Child Benefit claimants were supposed to receive HRP credits.
• However, if they did not provide their NI number, these credits were not transferred to their pension records.
• As a result, when these individuals retired, they received lower pensions than they were entitled to.

This error went unnoticed for decades, affecting around 210,000 pensioners, with the average underpayment estimated at £5,000 per person.

How HMRC is Fixing the Issue

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HMRC has launched a correction campaign to fix this problem. Here’s what’s happening:

Notification Process

• HMRC is sending letters in brown envelopes to affected pensioners, notifying them of potential underpayments.
• The Department for Work and Pensions (DWP) began processing these cases in early 2025.

Correction Process

• National Insurance records are being reviewed and updated to include missing HRP credits.
• Once records are corrected, the DWP will adjust pension payments and issue any owed back payments.

How to Check

If you think you might have missed HRP credits and were underpaid, follow these steps:

Step 1

• Log into your Gov.uk account and check your State Pension and National Insurance records.
• If you reached pension age after April 5, 2010, HRP or NI credits should be listed as a full qualifying year.

Step 2

• The UK Government has provided an Online Tool on Gov.uk to help individuals determine if they are missing HRP credits.

Step 3

• If you reached pension age on or before April 5, 2010, HRP was recorded differently.
• Call the National Insurance Helpline to confirm if HRP is missing from your records.

Step 4

• If your HRP credits are missing, you will need to fill out the CF411 Form to claim missing credits up until March 2010.

Step 5

• Once HMRC verifies your claim, they will update your records and issue any back payments owed.

Who Will Benefit?

✅ Stay-at-home parents or caregivers who claimed Child Benefit but didn’t submit their NI number.
✅ Individuals who retired with lower pensions due to missing HRP credits.
✅ Pensioners who receive a lower-than-expected state pension due to gaps in their NI contributions.

How Much Can You Expect?

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The amount owed varies depending on how many years of HRP credits were missing. The average back payment is estimated at £5,000 per person, but it could be more or less based on individual circumstances.

The HMRC Pension Correction Initiative is an important step in fixing decades-old pension underpayments. If you suspect you may have been affected, it is essential to check your records, use the online tool, and take action. Ensuring your National Insurance history is accurate could mean thousands of pounds in back payments and a higher pension moving forward.

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