HMRC £8,000 compensation due to hundreds of thousands of people - find out who is eligible

A tax error dating back almost 50 years could mean hundreds of thousands of women are entitled to compensation of nearly £8,000 each. HM Revenue and Customs (HMRC) has revealed an error in National Insurance and state pensions dating back to the 80s and 90s.

The problem, which relates to Home Responsibilities Protection (HRP), was used to cut the number of years someone needed on their National Insurance (NI) record before qualifying for the full state pension. The current requirement for a full pension is 35 years of NI contributions.

However, as many women missed out due to a break in employment when having children, a system was devised to address the problem - so mainly affects people who had children in the 80s and 90s.

Mothers who received Child Benefit or Income Support between 1978 and 2000 were eligible for HRP in order to claim their pensions, before the system was updated in 2010..

Despite this, HMRC has now revealed thousands of people may have missed out as their HRP entitlement was incorrectly recorded, or transferred to their NI record - and is attempting to address the problem.

Thousands of letters have now been sent out to around 370,000 people affected by the injustice, who could be entitled to compensation of up to £7,859.

Around 5,300 instances of underpayment from January to September 2024, amounting to a total debt of around £42 million have already been identified.

Another 43,000 of those affected may have already passed away, HMRC said, but their families can claim what is due from the Government.