Mothers miss out on £700 a year from state pension

TENS of thousands of mothers have missed out on £700-a-year in state pension payments due to computer glitches in the Eighties and Nineties, a former pensions minister has claimed.

According to Steve Webb, who served as pensions minister until last year, computer glitches have left holes in the National Insurance records of scores of stay-at-home mothers, who are due to receive a lower state pension as a result. The missing money equates to a total of around £500 million. Many of the women are believed to have now died, meaning they will never be compensated for the loss. The shortfall totals £13,000 over the retirement of someone who took three years off work to have children.

The errors are down to bungles in the Government’s IT systems which meant official records failed to consider “Home Responsibility Credits”, which were given to women from 1978 to protect their national insurance records.

The credits were brought in to put an end to women having to choose between staying at home to raise children and ensuring they had a full state pension by working.

The Government is encouraging older women to check if their national insurance records are correct via a new state pension website, but older women who have already retired do not qualify to use it and will have to call the Department for Work and Pensions if they want their records to be checked.

It is thought that those most likely to be affected are those who raised families in the Eighties and Nineties, when computer systems were more basic and prone to errors. The DWP has agreed to correct the mistakes and is compensating people where necessary.

The problem was identified several years ago when Mr Webb was in office. The DWP quietly launched an investigation which found around 100,000 women were affected by the glitch.

After further number crunching, it then wrote to 69,000 women warning they may be receiving the wrong amount of pension. It claimed that 45,000 of these people replied to the letters, but Mr Webb said this level of response would be “completely unprecedented”. He said he believed there were still at least 50,000 unresolved cases and that he did “not believe this has been fully dealt with yet”..

For every “missing” year of National Insurance, someone’s state pension is reduced by £13.34 a week. This means someone who took three years off work which was not properly recorded would lose £693 a year, or £13,875 over a typical 20-year retirement.

A DWP spokesman said people can use the Check your State Pension online service, which “allows people to review any gaps in their records”.