Frustrated pensioners who were shortchanged at 66 because their state pension top-ups payments had vanished have hit out at the ‘terrible’ and ‘troublesome’ service.
A retired lecturer from the West Midlands, whose £900 top-up went missing for nearly a year, says: ‘I think my position and that of many others, who are probably in a worse situation, is truly disgusting.’
And a retired policeman, who lives in Spain, says he made a series of costly phone calls to HMRC and Department for Work and Pensions before handing over nearly £2,400 last autumn, well before his 66th birthday.
‘You can guess my disappointment in February this year when I did not receive the full state pension – it is approximately £32 per week short,’ he told us.
This is Money has covered numerous cases of lost state pension top-up payments – including one saga lasting three years – and readers’ struggles to persuade government staff to help find their money.
People’s concerns intensify if they reach 66 and start receiving the wrong state pension.
State pension top-ups: HMRC is responsible for maintaining NI records and processing contributions, and DWP for revising forecasts or payments after purchases
DWP and HMRC, which run the top-ups system between them, have received a huge rush of new payments in recent months as savers sought to beat a crunch 5 April deadline.
A deal to buy voluntary state pension top-ups going back to 2006/07 has now ended – although you can still backdate for the past six years.
In the cases of missing cash we highlight today, a 66-year-old academic from Worcestershire says he bought three years of voluntary contributions, but one year paid for last May was not processed.
He found it ‘stressful and frustrating’ when a series of letters to the Government went unanswered – even after he turned 66 last December.
He told us: ‘I have been reading your articles about the terrible service provided by HMRC for National Insurance pension top-ups for well over two years now, and nothing seems to change.
‘The letters were special delivery and have all been delivered. I have never received any reply. The phone service is terrible and I have given up on this.’
After we flagged his case to DWP and HMRC, a spokesman responded: ‘We’ve written to Mr [redacted] to apologise and confirm his payment has been allocated. As he’s already in receipt of a state pension we will backdate the arrears so he doesn’t miss out.’
In the case of the former policeman who is an expat in Spain, he told us that he began the process of buying top-ups well ahead of his 66th birthday.
But despite making his payment last October, when his state pension arrived in February it was short of what he was owed.
‘I have lost interest on the lump sum, which I assume is earning money for the Treasury sitting in a bank account somewhere,’ he says.
‘I have found the staff I have dealt with to be very helpful and polite. It is getting through to them in the first place that is troublesome, and navigating whether I should be talking to HMRC or Pensions.’
In a third case, a 59-year-old retired energy broker who lives in Cyprus paid nearly £9,600 in October last year to top up his state pension.
He was told by a government staff member that processing time was 31 weeks, and says: ‘I can’t believe it would take seven or eight months to allocate cash once it’s been paid.’
‘I’ve tried calling numerous times but never get through to them and just get put on hold in the queue for hours on end racking up huge phone bills from abroad.
‘As this is such a large amount I thought it would have been allocated before now as it’s been over five months, rather than still sitting in the HMRC contributions account no doubt earning them considerable interest at my expense.’
Regarding the two latter cases, a Government spokesman says: ‘We have allocated these customers’ payments to their NI records and are sorry for the delay they faced.
‘Customers already in receipt of a state pension who make top-ups will have any arrears backdated to when they made their payments.’
Former Pensions Minister Steve Webb says: ‘Whilst I’m delighted that This is Money has helped to resolve matters for these readers, it should not have to reach this stage.
‘What is needed is much better communication by HMRC and DWP with those who have paid voluntary contributions, and a once-and-done approach whereby NI records are updated and state pensions recalculated in a single process.’
Webb, who is a partner at LCP and This is Money’s retirement columnist, adds: ‘All of this would greatly improve the service provided to taxpayers and would also cost the government less in time taken answering calls from people forced to keep ringing up to find out what on earth is going on.’
What do you need to know about buying top-ups
The Government provided the following information about buying state pension top-ups.
– The majority of payments made by people using the online check your state pension forecast service will show on their National Insurance records within five working days.
– Some payments may require manual processing, and these are being completed in around eight weeks. More complex cases including international payments requiring further checks can take longer to resolve depending on individual circumstances.
– DWP is experiencing high demand and will update customer pensions as quickly as possible. Customers will have arrears backdated to when they made payment to HMRC.
– People can now only pay voluntary contributions for the past six years. The deadline is 5 April each year. More information can be found on Gov.uk.
– Those who completed the callback request form before the 5 April deadline because they wanted to make voluntary contributions for between 2006 and 2018 will hear back from DWP in the coming weeks.
– People who live outside of the UK and are below state pension age should contact the Future Pension Centre to request a state pension forecast. The number to call from outside the UK is +44 (0)191 218 3600.
– Those overseas who are at, or within six months of reaching state pension age, need to contact the International Pension Centre by email using the online enquiry form.
– Once they have established if it is beneficial to make voluntary NI contributions, people overseas can apply online using the CF83 application form on Gov.uk.
– Before paying they must contact HMRC to obtain an 18-digit reference number to make their voluntary payment and specify the years they are paying for. The number to call for overseas customers is +44 (0)191 203 7010. The NI helpline is open Monday to Friday between 8am and 6pm.
