More than 100,000 mothers are set to lose out on vital state pension top-ups after a rule change at the Department for Work and Pensions (DWP) effectively ends efforts to track down victims of a decades-long blunder. In what campaigners have called a “hammer blow” to women in retirement, the DWP has quietly written off over £1 billion it previously earmarked to correct errors in National Insurance (NI) records linked to child benefit claims stretching back to 1978. The Government initially pledged to fix the issue and put aside £1.2bn to repay those short-changed – mostly mothers who took time out of work to raise children.

But a new annual report reveals it now expects to spend just £29.8 million more, meaning that 92% of those entitled to money may never receive a penny. Former pensions minister Sir Steve Webb accused ministers of abandoning thousands of mothers due to a failed letter-writing campaign and “dismal” reliance on online forms.

“This is totally unacceptable,” said Sir Steve, now a partner at LCP. The DWP’s latest report is a hammer blow to over 100,000 mothers who are receiving reduced state pensions because of errors on their National Insurance record.

“The Government’s letter-writing campaign has been a dismal failure, and this was entirely predictable given its reliance on a complicated online claims process. Although there will still be some ongoing publicity, the figures in the annual report are an admission that the Government itself does not expect these efforts to have much impact. In effect, the Government has all but given up on these mothers.”

The issue centres on a little-known benefit called Home Responsibilities Protection (HRP), introduced in 1978 to ensure parents – primarily mothers – didn’t lose out on state pension entitlements while raising children. HRP should have been automatically credited to those receiving child benefit, but administrative failings – particularly before 2000, when NI numbers weren’t required on forms – meant hundreds of thousands of women were missed off.

Those who retired before 2010 needed up to 39 qualifying years to get the full state pension. HRP could have knocked up to 22 years off that requirement. Women short by even a few years have been left out of pocket by thousands of pounds.

The DWP’s own data now reveals that just 12,379 cases have been corrected, with payouts totalling £104 million – an average of £8,377 per person. But following a woeful response to 370,000 letters sent out by HMRC last year – many of which were binned by recipients who feared they were scams – the DWP has slashed its expected take-up rate from 90 per cent to just 8 per cent.

Rachel Vahey, head of public policy at investment firm AJ Bell, warned the self-claim process was “dangerous”. She said: “The DWP has mismanaged state pension payments for thousands of people, and should be doing its level best to put the situation right.

“But relying on people self-claiming is a dangerous route to take – some may not understand the letter they have received, or be nervous about self-checking, maybe thinking that the letter is a scam. The state pension can be fiendishly complicated to understand.

“Lots of people might not realise they’re not getting the full amount.” She urged women who received child benefit before 2010, or anyone who knows someone in that category, to contact the National Insurance helpline on 0300 200 3500.

Despite removing £1bn from its accounts, the DWP insists it is still trying to help those affected. A spokesperson said: “We are determined to help people who have been left out of pocket as a result of historical errors which are no fault of their own.

“That’s why we wrote directly to over 370,000 of those who were potentially affected and launched an online tool to help people check if they needed to claim. We carried out an extensive campaign to raise awareness of the issue and will continue regular communications to get people to check their National Insurance record.”

But Sir Steve Webb insisted ministers need to launch a new campaign – this time with simple paper applications and a clear explanation of what’s at stake. “It is time for a fresh campaign of direct mail to the women potentially affected, this time making it much easier for women to apply and supported by a fresh publicity blitz,” he said.

Who’s eligible?

If you claimed Child Benefit between 1978 and 2010 and took time out of work, you may be missing National Insurance credits known as Home Responsibilities Protection (HRP).

How does this affect your pension?

Without HRP credits, your NI record may fall short of the 30-35 qualifying years required for a full state pension.

What to check:

Contact the National Insurance helpline on 0300 200 3500, or go to GOV.UK to check your NI record.

What can you claim?

Those underpaid could be entitled to back payments worth thousands of pounds. The average correction to date is £8,377.