HMRC alert as some women could lose money after pension change

25 June 2024 , 10:14

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Some people could be left worse off following a new HMRC letter (Image: iStockphoto)

An urgent letter from HM Revenue and Customs (HMRC) could mean that some women are at risk of losing parts of their income.

Approximately 210,000 individuals, predominantly women, have been notified by HMRC that they might be entitled to a significant sum due to a state pension error. The issue mainly affects women in their 60s and 70s who claimed Child Benefit between 1978 and 2000.

Many of those affected did not have their National Insurance credits, known as Home Responsibilities Protection (HRP) until 2010, correctly transferred. This was because some of those impacted did not include their National Insurance Number on their Child Benefit form, which has had repercussions on the amount of state pension they're currently receiving.

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In the event that a claim is made for a person's HRP, the Department for Work and Pensions (DWP) will carry out a review of that individual's state pension. A spokesperson for the DWP stated: "The action we are taking now will correct historical underpayments made by successive governments. We are fully committed to addressing these errors, not identified under previous governments, as quickly as possible."

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"We have set up a dedicated team and devoted significant resources towards completing this."

Some may be left in a worse position

While most women are set to see a significant boost in their income after DWP reassesses their state pension, there are some cases where people could find themselves worse off. In these instances, certain income sources may disappear, leading to either a negligible change or a substantial decrease in their payments.

Specifically, some individuals might be claiming both the state pension and Pension Credit simultaneously. To qualify for Pension Credit, a claimant's weekly income must be less than £218.15 (or £332.95 for couples).

As such, following a reassessment, an increase to a person's state pension could push their income just above this threshold, thereby disqualifying them from claiming Pension Credit.

It's not only the additional money that those claiming Pension Credit could lose out on, but also the benefits and extra support that come with it. For instance, Pension Credit can provide access to things like a Council Tax discount, a free TV licence, assistance with certain NHS treatments, and help with heating costs through the Warm Home Discount Scheme.

Kieran Isgin