HMRC Corrects Pension and Tax Errors Affecting Thousands

HM Revenue and Customs is currently addressing two distinct administrative failures that resulted in financial losses for hundreds of thousands of UK pensioners. The first issue involves Home Responsibilities Protection (HRP) between 1978 and 2010, where National Insurance records were not correctly linked to Child Benefit or Family Allowance claims. This error, which primarily affected records prior to 2000, may impact 210,000 people with average underpayments of £8,377.

To resolve the HRP issue, the government launched a free online tool for eligible parents and carers to verify their status. However, Elaine Walker of the advocacy group AskRose criticized the recovery process, stating that some clients waited over 15 years for a fair pension, and many passed away before claiming their owed funds.

Separately, the agency identified a 2010 PAYE system error that caused hundreds of thousands of pensioners to overpay tax due to incorrect State Pension figures. While many overpayments are small, the average unclaimed repayment is £473. HMRC is currently mailing approximately four million people regarding these refunds, a process expected to continue through August. John-Paul Marks, the Permanent Secretary of HMRC, apologized to the Public Accounts Committee for the error, acknowledging that any shortfall is significant for customers on limited incomes.