Latest news with #HelenMorrissey
Daily Record
an hour ago
- Business
- Daily Record
Older women urged to check for State Pension back payments worth over £8,300
The Department for Work and Pensions (DWP) has said that between January 8, 2024 and March 31, 2025, a joint State Pensions corrections exercise with HM Revenue and Customs (HMRC), identified 12,379 State Pension underpayments to women whose National Insurance (NI) records are incorrect. In 2022, the DWP became aware of a number of State Pension cases where it appeared that historic periods of Home Responsibilities Protection (HRP) were missing, leading to inaccurate State Pension payments. So far, around £104 million in arrears have been paid out, with an average payment of £8,377. Retirement expert Helen Morrissey is urging older people to complete the online form or contact the Pension Service if they think they have been affected after new research from the DWP showed the main reasons why those who have received a letter from HMRC asking them to check their State Pension - as it could be wrong - have failed to do so. HMRC has sent out more than 370,000 letters - mostly to women - urging them to check their State Pension payments as they may be lower than they are entitled to. However, the DWP research indicates that the majority of people contacted by letter did not go on to apply for HRP. Barriers included: Not understanding the letter Thinking the communication was a scam Reliance on digital methods to put in a claim HRP was a scheme designed to help protect parents' and carers' entitlement to the State Pension and was replaced by NI credits from April 6, 2010. HMRC is using NI records to identify as many people as possible who might have been entitled to HRP between 1978 and 2010 and have no HRP on their NI record. After May 2000, it became mandatory to include a NI number on claims so people claiming after this point will not have been affected. The head of retirement analysis at Hargreaves Lansdown, said: 'This research lays bare the complexities the government faces in resolving the long running issue of underpaid State Pensions. The State Pension system has become so confusing that even when the UK Government has communicated with those who may have a claim, the complexity and jargon has put many of them off. This means many thousands are getting less than they are entitled to. 'Issues identified by the government include the use of jargon. Many simply didn't understand what was being asked of them -that mistakes made decades ago had been identified and could be rectified. 'Terms such as Home Responsibilities Protection haven't been used for many years - it's understandable that people may have little recollection as to whether they claimed it or not. 'The reliance on online forms to claim refunds was also a significant barrier, with many not feeling internet savvy enough to navigate the system without help.' Ms Morrissey continued: 'Notably many people decided not to take action because they feared doing so might actually reduce their state pension or they were scared that they had been targeted by scammers. It's clear the government faces an uphill battle if it is to successfully reunite those affected with their extra pension payments. 'The introduction of the New State Pension system in 2016 was meant to simplify things - and it should, but again challenges remain for these younger groups. Those who opted out of Child Benefit because of the High-Income Child Benefit Charge will not have known that by doing so they risk missing out on National Insurance credits towards their State Pension.' The UK Government has put measures in place to deal with this, but Ms Morrissey warns it remains something that can 'trip people up and so awareness needs to be raised on an ongoing basis'. The retirement expert added: 'Encouraging people to check their State Pension record to see if there are any gaps is vital - if there are mistakes, then they have time to correct them. 'If the gap has occurred during a period of time when they qualified for a benefit, such as Child Benefit, then they can backdate a claim and get the gaps filled for free. There's also the option of paying for voluntary contributions to make sure you get the most from your state pension.' How to use the online HRP tool You may still be able to apply for HRP, for full tax years (6 April to 5 April) between 1978 and 2010, if any of the following were true: you were claiming Child Benefit for a child under 16 you were caring for a child with your partner who claimed Child Benefit instead of you you were getting Income Support because you were caring for someone who was sick or disabled you were caring for a sick or disabled person who was claiming certain benefits You can also apply if, for a full tax year between 2003 and 2010, you were either: Who qualified automatically for HRP The guidance on explains that 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 getting Income Support and they did not need to register for work because they were caring for someone who was sick or disabled If your partner claimed Child Benefit instead of you If you reached State Pension age before April 6, 2008, you cannot transfer HRP. However, you may be able to transfer HRP from a partner you lived with if they claimed Child Benefit while you both cared for a child under 16 and they do not need the HRP. They can transfer the HRP to you for any 'qualifying years' they have on their National Insurance record between April 1978 and April 2010. This will be converted into National Insurance credits. Married women or widows You cannot get HRP for any complete tax year if you were a married woman or a widow and: you had chosen to pay reduced rate Class 1 National Insurance contributions as an employee (commonly known as the small stamp) you had chosen not to pay Class 2 National Insurance contributions when self-employed If you were caring for a sick or disabled person You can only claim HRP for the years you spent caring for someone with a long-term illness or disability between April 6, 1978 and April 5, 2002. You must have spent at least 35 hours a week caring for them and they must have been getting one of the following benefits: Attendance Allowance Disability Living Allowance at the middle or highest rate for personal care Constant Attendance Allowance The benefit must have been paid for 48 weeks of each tax year on or after April 6, 1988 or every week of each tax year before April 6, 1988. You can still apply if you are over State Pension age. You will not usually be paid any increase in State Pension that may have been due for previous years. If you were getting Carer's Allowance You do not need to apply for HRP if you were getting Carer's Allowance. You'll automatically get National Insurance credits and would not usually have needed HRP. If you were a foster carer or caring for a friend or family member's child You have to apply for HRP if, for a full tax year between 2003 and 2010, you were either: a foster carer caring for a friend or family member's child ('kinship carer') in Scotland All of the following must also be true: you were not getting Child Benefit you were not in paid work you did not earn enough in a tax year for it to count towards the State Pension If you reached State Pension age on or after 6 April 2010 Any HRP you had for full tax years before April 6, 2010 was automatically converted into National Insurance credits, if you needed them, up to a maximum of 22 qualifying years. A full overview of HRP can be found on here.
The Herald Scotland
a day ago
- Business
- The Herald Scotland
State pension age review needed to ensure system ‘affordable'
The state pension age is currently 66, rising to 67 by 2028 and the Government is legally required to periodically review the age. The Chancellor told reporters: 'We have just commissioned a review of pensions adequacy, so whether people are saving enough for retirement, and also the state pension age. 'As life expectancy increases it is right to look at the state pension age to ensure that the state pension is sustainable and affordable for generations to come. 'That's why we have asked a very experienced set of experts to look at all the evidence.' The review was announced by the Department for Work and Pensions on Monday and will involve an independent report, led by Dr Suzy Morrissey, on specified factors relevant to the Review of State Pension Age along with the Government Actuary's Department's examination of the latest life expectancy projections data. Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: 'There will be many factors that need to be assessed during this review of the state pension age. 'One of the most important will be healthy life expectancy which according to the latest data hovers in the early 60s. 'This means the reality is that many people will face real difficulties in continuing to work until their mid-to-late 60s and could face a sizeable income gap while they wait to receive their state pension.' Rachel Vahey, head of public policy at AJ Bell, said: 'An ageing population places an increasing burden on taxpayers, with state pension costs rising and fewer working-age taxpayers to cover the cost. 'Future governments will hope that an improved economy and growing tax receipts will help alleviate some of the pressure. But that can't be guaranteed and there needs to a be a credible plan for maintaining affordability.'
Daily Mirror
2 days ago
- Business
- Daily Mirror
People on Basic State Pension told to check for payment errors
DWP wants people to get in touch if they think their pension is wrong Independent Age has shared a new State Pension factsheet, offering vital insights for older people who already receive the benefit, which is worth up to £230.25 each week, as well as those approaching retirement age. The informative guide delves into all aspects of the payments, clarifying the distinctions between the New and Basic State Pensions, the right time to claim, options for deferral, how the amount is determined, and potential tax obligations. Yet, it also addresses historical underpayments, prompting people on the Basic State Pension who might have missed out on National Insurance (NI) 'top-ups' to get in touch with the Pension Service for a recalculation if they suspect errors. A survey by Independent Age revealed that 41% of over-50s are worried about their post-retirement finances, with nearly half admitting to a lack of understanding regarding their financial prospects, including the State Pension, upon retiring, as reported by the Daily Record. Guidance from Independent Age reads: "If you qualify for Basic State Pension and can claim State Pension 'top-ups', these are usually calculated for you. But some people - particularly women who paid reduced NI rates - may have had their State Pension miscalculated and underpaid." "If you think this affects you, contact the Pension Service to ask them to recalculate your State Pension. You can do this whether you're claiming or delaying your State Pension. You can also contact our helpline to arrange to speak to an adviser." The comprehensive guide to the full State Pension is accessible on the Independent Age website here. Alternatively, you can reach out to them directly by dialling 0800 319 6789. State Pension historical errors The Department for Work and Pensions (DWP) has disclosed that a collaborative State Pensions correction initiative with HM Revenue and Customs (HMRC), running from January 8, 2024, to March 31, 2025, unearthed 12,379 cases of State Pension underpayments to women with erroneous National Insurance (NI) records. In 2022, the DWP detected several State Pension accounts where it seemed historic periods of Home Responsibilities Protection (HRP) were absent, resulting in incorrect State Pension disbursements. To date, approximately £104 million in arrears have been compensated, averaging payments of £8,377 each. Pension expert Helen Morrissey is calling on seniors to fill out the online form or get in touch with the Pension Service if they suspect they've been impacted. This is following new findings from the DWP which highlight the primary reasons why recipients who have received a letter from HMRC to verify their State Pension – due to potential inaccuracies – haven't responded. HMRC has dispatched over 370,000 letters, primarily to women, encouraging them to review their State Pension payments as they may be entitled to a higher amount. However, research from the DWP suggests that most people who received a letter did not subsequently apply for HRP. The barriers included: Not understanding the letter Thinking the communication was a scam Reliance on digital methods to put in a claim HRP was a scheme established to safeguard the State Pension entitlements of parents and carers, which was superseded by NI credits from 6 April 2010. HMRC is utilising NI records to identify as many people as possible who may have been eligible for HRP between 1978 and 2010 and who do not have HRP on their NI record. After May 2000, it became compulsory to include a NI number on claims, so those who claimed after this date will not have been affected. You might still be able to apply for HRP, for full tax years (6 April to 5 April) between 1978 and 2010, if any of the following were true: you were claiming Child Benefit for a child under 16 you were caring for a child with your partner who claimed Child Benefit instead of you you were getting Income Support because you were caring for someone who was sick or disabled you were caring for a sick or disabled person who was claiming certain benefits You can also apply if, for a full tax year between 2003 and 2010, you were either: a foster carer caring for a friend or family member's child ('kinship carer') in Scotland Who qualified automatically for HRP The guidance on explains that 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 getting Income Support and they did not need to register for work because they were caring for someone who was sick or disabled If your partner claimed Child Benefit instead of you If you reached State Pension age before April 6, 2008, you cannot transfer HRP. However, you may be able to transfer HRP from a partner you lived with if they claimed Child Benefit while you both cared for a child under 16 and they do not need the HRP. They can transfer the HRP to you for any 'qualifying years' they have on their National Insurance record between April 1978 and April 2010. This will be converted into National Insurance credits. Married women or widows You cannot get HRP for any complete tax year if you were a married woman or a widow and: you had chosen to pay reduced rate Class 1 National Insurance contributions as an employee (commonly known as the small stamp) you had chosen not to pay Class 2 National Insurance contributions when self-employed If you were caring for a sick or disabled person You can only claim HRP for the years you spent caring for someone with a long-term illness or disability between April 6, 1978 and April 5, 2002. You must have spent at least 35 hours a week caring for them and they must have been getting one of the following benefits: Attendance Allowance Disability Living Allowance at the middle or highest rate for personal care Constant Attendance Allowance The benefit must have been paid for 48 weeks of each tax year on or after April 6, 1988 or every week of each tax year before April 6, 1988. You can still apply if you are over State Pension age. You will not usually be paid any increase in State Pension that may have been due for previous years. If you were getting Carer's Allowance You do not need to apply for HRP if you were getting Carer's Allowance. You'll automatically get National Insurance credits and would not usually have needed HRP. If you were a foster carer or caring for a friend or family member's child You have to apply for HRP if, for a full tax year between 2003 and 2010, you were either: a foster carer caring for a friend or family member's child ('kinship carer') in Scotland Article continues below All of the following must also be true: you were not getting Child Benefit you were not in paid work you did not earn enough in a tax year for it to count towards the State Pension If you reached State Pension age on or after 6 April 2010 Any HRP you had for full tax years before April 6, 2010 was automatically converted into National Insurance credits, if you needed them, up to a maximum of 22 qualifying years. A full overview of HRP can be found on here.
Daily Record
2 days ago
- Business
- Daily Record
People on Basic State Pension urged to check for historical DWP payment errors
The charity Independent Age has launched a handy State Pension factsheet providing essential information for older people already claiming the contributory benefit worth up to £230.25 each week, or those nearing the official age of retirement. The helpful guide covers everything you need to know about the payments, including the difference between the New and Basic, when to claim it, deferring, how the amount is calculated and when you might need to pay tax. However, it also takes a look at historical underpayments and urges those on the Basic State Pension who may have been due National Insurance (NI) 'top-ups' to contact the Pension Service to ask them to recalculate their State Pension if they think it might be wrong. A survey carried out by Independent Age found that 41 per cent of people aged 50 and over were anxious about their finances after retirement. Almost half said that they didn't have much knowledge of what financial options, including the State Pension, would be available to them once they retired. Independent Age guidance states: 'If you qualify for Basic State Pension and can claim State Pension 'top-ups', these are usually calculated for you. But some people - particularly women who paid reduced NI rates - may have had their State Pension miscalculated and underpaid. 'If you think this affects you, contact the Pension Service to ask them to recalculate your State Pension. You can do this whether you're claiming or delaying your State Pension. You can also contact our helpline to arrange to speak to an adviser.' The full State Pension help guide can be found on the Independent Age website here. You can also call them directly on 0800 319 6789. State Pension historical errors The Department for Work and Pensions (DWP) has said that between January 8, 2024 and March 31, 2025, a joint State Pensions corrections exercise with HM Revenue and Customs (HMRC), identified 12,379 State Pension underpayments to women whose National Insurance (NI) records are incorrect. In 2022, the DWP became aware of a number of State Pension cases where it appeared that historic periods of Home Responsibilities Protection (HRP) were missing, leading to inaccurate State Pension payments. So far, around £104 million in arrears have been paid out, with an average payment of £8,377. Retirement expert Helen Morrissey is urging older people to complete the online form or contact the Pension Service if they think they have been affected after new research from the DWP shows the main reasons why those who have received a letter from HMRC asking them to check their State Pension as it could be wrong - have failed to do so. HMRC has sent out more than 370,000 letters - mostly to women - urging them to check their State Pension payments as they may be lower than they are entitled to. However, the DWP research indicates that the majority of people contacted by letter did not go on to apply for HRP. Barriers included: Not understanding the letter Thinking the communication was a scam Reliance on digital methods to put in a claim HRP was a scheme designed to help protect parents' and carers' entitlement to the State Pension and was replaced by NI credits from April 6, 2010. HMRC is using NI records to identify as many people as possible who might have been entitled to HRP between 1978 and 2010 and have no HRP on their NI record. After May 2000, it became mandatory to include a NI number on claims so people claiming after this point will not have been affected. How to use the online HRP tool You may still be able to apply for HRP, for full tax years (6 April to 5 April) between 1978 and 2010, if any of the following were true: you were claiming Child Benefit for a child under 16 you were caring for a child with your partner who claimed Child Benefit instead of you you were getting Income Support because you were caring for someone who was sick or disabled you were caring for a sick or disabled person who was claiming certain benefits You can also apply if, for a full tax year between 2003 and 2010, you were either: a foster carer caring for a friend or family member's child ('kinship carer') in Scotland Who qualified automatically for HRP The guidance on explains that 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 getting Income Support and they did not need to register for work because they were caring for someone who was sick or disabled If your partner claimed Child Benefit instead of you If you reached State Pension age before April 6, 2008, you cannot transfer HRP. However, you may be able to transfer HRP from a partner you lived with if they claimed Child Benefit while you both cared for a child under 16 and they do not need the HRP. They can transfer the HRP to you for any 'qualifying years' they have on their National Insurance record between April 1978 and April 2010. This will be converted into National Insurance credits. Married women or widows You cannot get HRP for any complete tax year if you were a married woman or a widow and: you had chosen to pay reduced rate Class 1 National Insurance contributions as an employee (commonly known as the small stamp) you had chosen not to pay Class 2 National Insurance contributions when self-employed If you were caring for a sick or disabled person You can only claim HRP for the years you spent caring for someone with a long-term illness or disability between April 6, 1978 and April 5, 2002. You must have spent at least 35 hours a week caring for them and they must have been getting one of the following benefits: Attendance Allowance Disability Living Allowance at the middle or highest rate for personal care Constant Attendance Allowance The benefit must have been paid for 48 weeks of each tax year on or after April 6, 1988 or every week of each tax year before April 6, 1988. You can still apply if you are over State Pension age. You will not usually be paid any increase in State Pension that may have been due for previous years. If you were getting Carer's Allowance You do not need to apply for HRP if you were getting Carer's Allowance. You'll automatically get National Insurance credits and would not usually have needed HRP. If you were a foster carer or caring for a friend or family member's child You have to apply for HRP if, for a full tax year between 2003 and 2010, you were either: a foster carer caring for a friend or family member's child ('kinship carer') in Scotland All of the following must also be true: you were not getting Child Benefit you were not in paid work you did not earn enough in a tax year for it to count towards the State Pension If you reached State Pension age on or after 6 April 2010 Any HRP you had for full tax years before April 6, 2010 was automatically converted into National Insurance credits, if you needed them, up to a maximum of 22 qualifying years. A full overview of HRP can be found on here.
Scottish Sun
5 days ago
- Business
- Scottish Sun
Pension warning over easy mistake that could cost you £22,500 in your golden years
Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) PENSION experts have warned of a mistake that could cost you up to £22,500 in your retirement. If you're planning on taking money out of your pension while you're still paying into it, you need to be aware of a rule around the annual allowance. Sign up for Scottish Sun newsletter Sign up 1 You can normally start taking money out of your pension at 55 Credit: Alamy Typically from the age of 55, you're allowed to take out up to 25 per cent from your pension without paying any tax, as long as you take it out in lump sums rather than a regular income. The Money and Pensions Service (MaPS) is warning people that they could end up hugely reducing the amount they can contribute to their pension if they take out more than the tax-free allowance. 'If you want to start taking an income from your pension - for example an annuity or drawdown - on top of your tax-free cash, your annual allowance could drop significantly," Rebecca Fearnley, from MaPS, told The Sun. "Taking just the tax-free cash, which can be up to 25% of your pension pot, means that your annual allowance won't be affected. 'For most people, the annual allowance is £60,000, but this will reduce to £10,000 if you start drawing money from your pension while you're still paying into it, so it's important to be aware of, as you could lose a significant amount of tax relief. If you were to lose £50,000 of your tax-free pension allowance, you'd suddenly be looking at a tax bill of £10,000 on £50,000 for a basic rate taxpayer. If you're a higher rate taxpayer, that's £20,000, while an additional rate taxpayer pays £22,500. Hargreaves Lansdown head of retirement analysis Helen Morrissey says the rule "can land you with a nasty unexpected tax bill if you are caught unawares." "It affects those who have so-called flexibly accessed their pension so you won't be affected if you have only taken your tax-free cash. "It has been a key issue for people who may have flexibly accessed their pension during a period when they were out of work and then want to rebuild it once they get a new job," she added. You can visit for more guidance around taking money from your pension, or contact your pension provider. What is the annual allowance? YOUR annual allowance is the most you can save in your pension pots in a tax year (6 April to 5 April) before you have to pay tax. You'll only pay tax if you exceed the annual allowance, which is £60,000 this tax year. Your annual allowance applies to all of your private pensions if you have more than one. However, as soon as you take a lump sum from your pot, this affects how much you can continue to save for retirement. The annual allowance falls to £10,000. If you want to carry on building up your pension pot, this option might not be suitable. How can I take money out of my pension? You can take up to 25 per cent of your total pension as a tax-free lump sum, normally from the age of 55. However, the maximum you're allowed to take out in this way is £268,275. There are other ways that you can take money from your pension pot. Some providers allow you to withdraw cash directly from your pension pot, either in its entirety or as smaller cash sums. You may also be able to buy an annuity from an insurance company that will provide you with regular payments from your pension for life. You can ask your pension provider to pay for this out of your pension pot. Some annuities will be for a fixed number of years, while some will continue to pay your spouse or partner after you die. The amount you get will depend on how long the insurance company expects you to live for and how many years they'll need to pay you. They will take into account things like your age, gender and health, as well as interest rates and the size of your pension pot. You can also invest into a drawdown, which is a way of taking money out of your pension pot to live on when you retire. This gives you more flexibility over how and when you receive your pension. You can take up to 25% as tax-free lump sum and the rest of your pension remains invested, meaning it can grow. You can then choose whether you want a regular income or amounts as and when you need them. It's important to note that your invested pot can go down as well as up, so you could run out of money. You can find out from your pension provider which options they offer. Do you have a money problem that needs sorting? Get in touch by emailing money-sm@ Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories
