The rush to buy state pension top-ups ahead of the April deadline has caused a six to eight month backlog to process payments, according to feedback from This is Money readers.
Sharon Gray, a retired civil servant from Herefordshire who paid £6,000 in March, was informed that this was the current wait time by a Department for Work and Pensions staff member.
Mrs Gray, pictured below, is 66 and had rung up both the HMRC and DWP – which run the top-ups service between them – to find out when she could expect her state pension to increase.
She asked the DWP if people like her who are already receiving a state pension were being prioritised and was told they were not by the staff member.
Mrs Gray says it didn’t sound to her like the DWP had put extra staff onto processing top-ups payments, and that she was then told by the staff member: ‘We are just working our way through them and there is nothing you can do. You have to wait.’
However, the DWP has since told us that is prioritising the cases of people over 66 and has doubled staff working on top-ups – see its statement below.
This week, This is Money has also heard from two other readers who bought top-ups in November – one of whom will be 66 and start receiving his state pension later this month – but half a year later have not had records updated.
Another reader, who is 66 and lives in France, told us she paid in January and is still waiting for an increase in her payments.
Sharon Gray: DWP staff member told her there would be a six to eight month wait to boost her state pension
Earlier this week, we covered the cases of pensioners who were shortchanged at 66 because their state pension top-ups payments had vanished, and who hit out at the ‘terrible’ and ‘troublesome’ service.
They were the latest in a run of 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.
DWP and HMRC have received a huge rush of new top-ups 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.
The DWP launched a callback service, which is now closed, to handle the volume of enquiries. If you signed up you should be contacted to discuss your situation, and still be able to buy top-ups for earlier years.
If you are over 66, you will receive state pension arrears going back to the date of your top-up payment in addition to your increase, so you will not ultimately see a shortfall.
Mrs Gray told us she is not in urgent need of her state pension increase, but during the publicity surrounding the deadline many people were asking if they should take out loans to buy top-ups, and it is likely some of them did.
She commented to us that the general public is currently unaware of a 6-8 month backlog to process top-ups payments, and some people might suffer severe financial difficulty if they cannot afford to wait a long time for higher payments to start.
Mrs Gray says: ‘I was really surprised there hasn’t been any coverage of this delay, especially given the level of publicity and coverage of the voluntary National Insurance contribution deadline.
‘I was also surprised that they have no mechanism to prioritise updates for people already in receipt of state pension.
‘I wonder if others are getting a similar message from DWP and if there is any additional resource being made available to the department to deal with this?’
One of the other readers who contacted us this week told us that if they didn’t get the increase they paid for, they would be struggling to pay bills.
A DWP spokesperson said regarding Mrs Gray’s comments: ‘We do not recognise these claims and we are prioritising customers over state pension age so they can receive the immediate support to which they are entitled.
‘We have doubled the number of staff on the team and are working at pace to process payments to customers.’
> Bought top-ups? See the box above for how to contact This is Money
Former Pensions Minister Steve Webb, who is This is Money’s retirement columnist, says: ‘For those who are already over state pension age and short of a full pension, it cannot be right that they have to wait months to get their pension reassessed.
‘The Government must have known that there would be a surge of payments in the weeks and months leading up to the final deadline and should have put in place extra capacity to keep processing times down.’
Webb, who is a partner and pension consultant LCP, adds: ‘As things stand, people are losing out on the interest on hundreds or thousands of pounds in contributions and simply have to sit and wait until their case gets to the top of the queue.’
