State pension top-ups: HMRC, pictured, takes in extra contributions then the DWP recalculates forecasts or payments
A 68-year-old whose £11,500 state pension top-up cash went missing last March pleaded for help for months but received no help from Government staff.
The retired taxi driver told This is Money he felt ‘terrible’ and ‘very stressed out’ about the loss of such a huge sum, after making dozens of futile calls to HMRC and the Department for Work and Pensions.
We were also contacted by a 66-year-old business owner who handed over a total of around £3,300 in December and February, and likewise got nowhere trying to find her money.
‘I don’t really know where to start, this whole experience has been such a farce,’ she says. Read a log of her fruitless efforts to flag her situation to government staff below.
A string of our readers have struggled to trace thousands of pounds of state pension top-up money that vanished, but these two cases are arguably the most serious we have covered to date.
Former Pensions Minister Steve Webb slammed the customer service involved here as ‘simply woeful’, and called on HMRC and DWP to ‘see the system through the eyes of the citizen’.
Another former Pensions Minister, Ros Altmann, said complex rules and the involvement of two departments was causing ‘untold confusion which leaves people’s pension records in limbo’.
And Liberal Democrat Work and Pensions spokesperson, Wendy Chamberlain, said: ‘Pensioners deserve better than this heartless incompetence.’
Why are savers having trouble buying state pension top-ups?
We have covered the rolling chaos in the state pension top-ups system since the start of this year, after a rush of buyers caused a payments backlog.
The system involves HMRC taking in extra contributions and updating National Insurance records, then the DWP recalculating state pension forecasts or payments.
But there was turmoil when savers jammed phonelines ahead of a crunch deadline – ultimately forcing the Government to extend it twice.
We continue to hear from a stream of frustrated savers who tell us thousands of pounds of their top-ups cash has vanished.
They claim that they either can’t get through on DWP or HMRC phonelines, or if they do staff fail to provide any help.
This is despite the Government saying most top-ups are processed in days, and it is unclear why some of our readers have run into problems because they have checked sums are correct with DWP in advance, and paid by bank transfer using a reference given to them by HMRC.
Savers don’t receive receipts or acknowledgements when they make payments. And when their cash appears to go missing in one or other department or between them, they cannot tell if it is just sitting in a queue, temporarily mislaid or actually lost.
A number of people have now asked us what would happen if they died while still waiting for their top-ups money to be processed, and we passed this question to the Government but received no response.
Should this sadly occur it would be worth beneficiaries trying to get a refund of their loved one’s cash. You can ask your MP for help, or contact This is Money – find our details below.
In response to our two latest cases, the Government sorted them both out and repeated the statement it has sent us in the past, saying: ‘The vast majority of voluntary contributions paid result in records being updated within days, though more complex cases requiring specialist caseworkers can take longer to resolve.
‘We have extended the deadline to 5 April 2025 to give taxpayers more time to fill gaps in their National Insurance record and help increase the amount they receive in state pension, and we aim to update state pension records as soon as possible once notified that HMRC have allocated a payment to someone’s National Insurance record.’
The Government added that where delays do occur, it apologises for any inconvenience caused to the individual affected, and that it has extra staff dealing with voluntary state pension contributions.
Steve Webb, who is now a partner at LCP and This is Money’s pensions columnist, said: ‘It can be incredibly frustrating to try to get things sorted out on the phone.
‘People get passed from one person to another, promised calls back do not happen, and they end up holding on for ages for someone to answer only to get cut off. The customer service in these cases is simply woeful.
‘Both HMRC and DWP need to see the system through the eyes of the citizen and make sure people can actually get things sorted out when they go wrong”.
‘The Government must immediately put special measures in place to identify what is going wrong with their advice lines, and make sure no one else’s money goes missing.
Wendy Chamberlain, Liberal Democrats
Lady Altmann, a long-time campaigner on pensions who now sits in the House of Lords, says: ‘Once again, the complexity of the state pension rules is creating huge administrative problems for staff at both DWP and HMRC.
‘The old state pension system required liaison between the two departments and that has created untold confusion which leaves people’s pension records in limbo.
‘I am pleased the Government has extended deadlines to 2025 and would expect these kinds of delays to persist as there are so many people with complex past records that will need to be sorted out.’
Wendy Chamberlain, of the Lib Dems, said: ‘The inability of this Government to carry out even basic functions of public service is astounding.
‘It should go without saying that if you tell people to call for advice, that this should be readily available and correct. If you tell people to make payments, then their money should be kept safe. And that if you have made pledges to protect pensioners, then you shouldn’t abandon them to struggle.
‘The Government must immediately put special measures in place to identify what is going wrong with their advice lines, and make sure no one else’s money goes missing. Pensioners deserve better than this heartless incompetence.’
‘I am getting very stressed out with the situation’
Stirling Fleck paid more than £11,500 for 14 years of voluntary contributions in March, because he had nine qualifying years and you need at least 10 to receive a state pension.
He had previously worked as a taxi driver, and been a carer for his mother.
Mr Fleck, who lives in Essex, told us: ‘I have phoned dozens and dozens of times and been put through to loads of different departments. I still have not heard anything and nothing still has been sorted out.
‘I cannot claim my state pension until this is sorted. I am getting very stressed out with the situation.’
He said he was at a loss and would like to know where his money has gone, or at least have it returned to him if there was a problem, and added: ‘I have made so many calls. I just feel terrible.’
HMRC said it wrote to Mr Fleck in April asking for clarification on which years he wished to pay for, and he wrote back in May but unfortunately this letter was mistakenly forwarded to the incorrect department.
It has now written to Mr Fleck to apologise for the delay, and he has started getting his state pension and received arrears of nearly £4,000.
‘This whole experience has been such a farce’
Angela Smith (whose name has been changed) paid £800 in December and nearly £2,500 in February to boost her state pension when she turned 66 in March.
She had called both HMRC and DWP before doing this, and at one point says she was wrongly informed by a staff member that she could buy cheaper ‘class 2’ instead of the more usual ‘class 3’ contributions for several years when she had lived in Spain.
After buying top-ups in two instalments, she spent months chasing up what had happened to her cash and appealing to Government staff to track it down, but got nowhere – see her call log below.
Mrs Smith, a business owner who lives in the West Midlands, said her husband bought top-ups at the same time as she did, and they couldn’t fathom why his went through with no problem while her money had apparently disappeared.
In September, nine months after making her first payment, she contacted This is Money to ask for help.
She told us: ‘I don’t really know where to start, this whole experience has been such a farce, as if having to wait an extra six years to get my pension wasn’t bad enough.’
After we intervened in her case, HMRC allocated her payments, updated her NI record and wrote to her to apologise for the delay. Her state pension was increased and she has received arrears of £580.
How to buy state pension top-ups? What else does the Government say
The DWP and HMRC provided further information about current delays processing top-up payments, and what it is doing with people’s money in the meantime.
– They have extra staff answering phone calls and dealing with correspondence on voluntary contributions, including processing refunds.
– System improvements made since May mean the vast majority of payments made via bank transfer, for all years dating back to 2006, are being processed within days. Payments made via cheque can take up to eight weeks to process.
– HMRC’s latest performance statistics, including for National Insurance, for January to March are here.
– People who need to apply for a refund of voluntary contributions can check here: Claim a National Insurance refund.
– Payments made to HMRC are added to money it collects for the Exchequer, which is used to pay for vital public services and helps families and individuals with targeted financial support.
– Voluntary National Insurance contributions do not always increase your state pension and you should check you would benefit before making any payments.
– If you’re below state pension age, contact the Future Pension Centre to find out more. If you’ve reached state pension age, contact the Pension Service.
– If you need a reference number to make payments for voluntary contributions contact HMRC.
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