Blunders means thousands of state pensions have been underpaid

Could mistakes in your National Insurance data mean you’re being ripped off?

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A728GG social security retirement pension book and money

Around 30,000 people have been ripped off by the Department of Work and Pensions, which has been paying them less state pension than they were entitled to. We all need to check our National Insurance records, to ensure we don't become victims of a mistake that has left thousands of people short changed.

The mistakes surround how many years of National Insurance contributions people have. The taxman holds the information, but it is collected from employers. The strength of the data depends on how robust the employer's systems are - and how robust they have been for decades. In many cases employers collected data manually, relying on perfect data entry by human beings - who weren't designed to be foolproof in this regard.

Where the employer has submitted incorrect figures, false gaps have opened up in people's National Insurance records. Where they make it look as if someone has insufficient contributions for a full state pension, they will have been receiving a far smaller amount then they should.

What can you do?

The government told the Daily Mail people should check that their records are correct, using the 'Check your State Pension' online service. It will show any gaps in your National Insurance record, so you can check that against your work history to see if there are any errors. It's also worth asking for a forecast of your state pension from the HMRC, to see whether it matches your expectations.

If you spot any mistakes, you should contact your tax office. You can send proof that you were working and making national insurance contributions during the time it claims there's a gap in your records, so they can correct the error before you reach state pension age.

These aren't the only problems with the state pension systems. Only last month it emerged that tens of thousands of stay-at-home mums in the 80s and 90s may receive too little state pension, because calculating the correct National Insurance records means bringing together the IT system holding information on child benefit with the one holding National Insurance records - raising the risk of IT problems.

It demonstrates the inherent risk of tinkering with state pensions. The enormous legacy IT systems within government are being required to do things that were never dreamed of when the systems were built. They have to interact with employers' IT systems, and gather information from entirely separate programmes from other government departments. None of these systems were designed to communicate with one another, because nobody imagined that they would every have to.

The fact that issues are emerging should not, therefore, come as a huge surprise.

All we can do is check our own records, and take steps to correct any mistakes, to ensure none of this means we face accidental state pension cuts.

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