Kate Phillips: Handed over £11,500 and nine months later was still waiting for state pension top-ups to be processed
Frustrated savers are continuing to complain of state pension top-ups chaos as the Government readies a new online service for launch by early April.
The Department for Work and Pension and HMRC must put enough staff in place to make sure the whole system does not ‘fall over’ under a new surge of top-up purchases, warns former Pensions Minister Steve Webb.
Liberal Democrat spokesperson Wendy Chamberlain MP says she welcomes the new online system but it is no solution to current delays, and ‘little comfort to pensioners out of pocket now’.
Kate Phillips, pictured right, paid nearly £11,500 for state pension top-ups last April which vanished into the system, and told us: ‘I’m at a loss as to how to proceed.
‘After so long with no contact I am at the point of thinking where is the money? Has it gone into a black hole and I will never be able to prove I paid it?’
Another This is Money reader paid £3,250 last March, and was refunded £770 in July, but was still waiting for the rest of her top-ups to be processed nearly a year later.
‘I am tearing my hair out and don’t know who to call now or which telephone number,’ she told us.
‘I started receiving my state pension in 2020 but the amount has not increased after my National Insurance voluntary payment.’
Despairing savers continue to contact us with stories of administrative turmoil in the top-ups system, with jammed or dead phonelines and staff unable to help when they do get through.
An unknown amount of people’s top-ups cash is sitting unallocated in Government coffers.
In response to our latest cases, DWP and HMRC, which run the system between them, says hundreds of thousands of people have contacted it about top-ups over the past year and the vast majority of payments resulted in records being updated within days.
Whilst a move to a digital online service could streamline the process, the government needs to make sure that it has the capacity to deal with a potential surge in top-ups
Steve Webb, former Pensions Minister
‘Complex cases requiring specialist caseworkers, including international applications, can take longer to resolve – but we’re making good progress on reducing wait times.
‘A new online service to allow most people to see if making voluntary contributions would increase their state pension, and then make those payments, is expected to be ready later this financial year.
‘An online application process for certain groups applying to pay for periods spent living or working abroad was introduced on 31 January.’
The Government adds that it has extra staff answering phone calls and dealing with correspondence on voluntary contributions.
We explain more about the new online service and what people whose top-up payments are still stuck in the system can do below.
This is Money is urging savers to complain to their MPs, both to get individual delays sorted out and to flag the problems more widely at Westminster.
> Scroll down for former politician Steve Webb’s tips on getting YOUR messages noticed and acted on by your MP
How will new online top-ups service work?
Buying top-ups can give a generous boost to retirement income if you buy the correct years on your record.
Most people should be able to use a new online service, which HMRC and DWP aim to introduce before the end of the financial year on 5 April, once development and testing are successfully completed.
At the end of January, a digital application process for top-ups covering periods spent living or working abroad was launched, meaning people no longer have to post a CF83 form.
The Government says it is working to help more people get access to online services while keeping their information secure.
People living overseas can verify their identity using the GOV.UK ID Check app to access services.
Buying top-ups is expected to be simpler and easier once the new service is fully up and running, but it is unclear if the subsequent updating of National Insurance records and state pension payments that is needed will also be streamlined.
The process currently involves contacting the DWP, which checks and tells you which years are worth topping up; obtaining a reference number from HMRC before making a purchase; HMRC taking the payment for extra contributions and then updating National Insurance records; then the DWP recalculating state pension forecasts or payments.
The system was overwhelmed early last year when a rush of buyers jammed phonelines ahead of a crunch deadline – ultimately forcing the Government to extend it twice, now to April 2025.
Although the Government insists the vast majority of payments are processed within days, many readers have complained to us of long delays.
This includes cases where payments were made by bank transfer and appear straightforward, although people who live overseas, have deferred their state pension or for some reason require refunds are most likely to get stuck in the system.
Readers tell us that even after waiting months or even a year, they receive little to no information from DWP and HMRC staff if they get through on the phone, and they don’t know if payments are just in a queue or lost because they receive no receipt or acknowledgement of purchase.
Steve Webb, who is now a partner at LCP and This is Money’s pension columnist, has noted that cases we cover reveal delays both with HMRC crediting contributions to accounts and DWP then updating state pension records.
‘Whilst a move to a digital online service could streamline the process, the government needs to make sure that it has the capacity to deal with a potential surge in top-ups.
‘There is a risk that if the promised digital service goes ahead it could create a fresh wave of contributions leading to new delays.
What pensioners need is funding for properly trained staff now. For proper advice to be given, phones answered, and their money kept safe
Wendy Chamberlain. Liberal Democrat Work and Pensions spokesperson
‘It is vital that HMRC and DWP plan ahead and put enough staff in place to make sure that the whole system does not fall over as a result.’
Liberal Democrat Work and Pensions spokesperson, Wendy Chamberlain, says of our latest cases of top-up problems: ‘It is clear to anyone that these DWP delays are completely routine and not complex as suggested by the Government. I raised this with the Pensions Minister in a meeting just last week.’
She adds: ‘I welcome this new online system but this is no solution. Given the year on year delays to the pensions dashboard, it is little comfort to pensioners out of pocket now; whilst others may not want or be able to use a digital platform.
‘What pensioners need is funding for properly trained staff now. For proper advice to be given, phones answered, and their money kept safe. This is the promise sadly missing from the Government.’
Chamberlain has pressed the Treasury for details of top-up staffing levels at HMRC via a parliamentary question, and was told 200 extra staff were taken on last April to handle calls and letters.
That was at the height of the top-ups rush, between the first and the second announcements that the deadline would be pushed back.
However, in its response to Chamberlain the Treasury added that it expected the online service to result in a reduction in ‘operational resource’, though it did not mention when cuts would happen.
Former Pensions Minister Ros Altmann, a longtime pensions campaigner who now sits in the House of Lords, says: ‘I do sympathise with all those who have paid extra contributions and can’t then find out what has happened to them.
‘It seems that both HMRC and DWP are saying they know some cases will take longer, and once This is Money intervenes they act to find out and identify the answers, but in the meantime many people can’t seem to get through.
‘The whole area is very complicated and it seems one of the big problems is that people can’t find out any information at all, for necessary reassurance.
‘I believe that DWP is prioritising payments for those closest to pension age and living in the UK, with those living overseas taking longer and younger people who will not receive pensions soon having to wait longer too.
‘Of course, ideally one would want everyone to be dealt with straight away, but the complexity and numbers of applications make that impossible.’
‘I am tearing my hair out and don’t know who to call now’
Fiona Moore (name changed) paid £3,250 for state pension top-ups in March last year, but a letter to chase this up got no response and phone calls rung out then she got cut off.
The 69-year-old says she was wrongly informed in the first place by DWP about which years to top up, and this resulted in a £772 refund last summer but no action on the rest of her payment.
Ms Moore, a retired communications and marketing manager who lives in North Yorkshire, did get through to HMRC last November, and recounts: ‘They said they had done their part in allocating money, it was now down to [DWP’s] Future Pensions Centre to respond.
‘I am tearing my hair out and don’t know who to call now or which telephone number. I started receiving my state pension in 2020 but the amount has not increased after my NI voluntary payment.
‘I have spent hours on the phone trying to find someone who can answer my questions.’
She adds: ‘It’s the frustration. It should be simple.’
After This is Money raised her case, Ms Moore received arrears of £850 and her state pension was increased from £169 to £186 a week.
‘Will I be able to prove I handed over £11,500?’
Expat Kate Phillips bought top-ups worth £11,500 in April last year, and the money left her account almost straight away
The college lecturer in human biology, who lives in the US, contacted us in January to say: ‘In the 280 days since, I’ve had Covid, been vaccinated against Covid five times, had a new grandchild, caught Covid again, started and finished a major house renovation and joyfully, seen my predicted weekly state pension increase nicely following the voluntary payment I made.
‘No, wait, that last part hasn’t happened.’
Ms Phillips says she tried ringing two state pension helplines for people overseas and found one was dead and one had a message on it saying it was no longer operating.
‘The Government has had my money for more than nine months, communicated with me zero times, closed down their telephone line for queries and made no adjustments to my predicted state pension. I’m at a loss as to how to proceed,’ she told us.
Ms Phillips adds: ‘I wasn’t worried to start with. They had pushed the deadlines back. But after so long with no contact I am at the point of thinking where is the money? Has it gone into a black hole and I will never be able to prove I paid it?’
After we intervened, HMRC processed her payment and DWP updated her state pension forecast.
‘If I ran a business this way I would be bankrupt’
Robert Granicz paid £4,100 for state pension top-ups in February 2023, and this sum will be refunded in full after we flagged his case.
After sitting on his money for one year, the Government told us Mr Granicz was not eligible to boost his state pension in the years he paid for because he did not move to the UK until 2011.
The Government did not inform the 69-year-old company manager, who is a British citizen and lives in Northamptonshire, about this rule when he first asked if it was worth him buying top-ups, nor after his payment despite his repeated letters to the DWP and a complaint to his MP.
After his MP got involved, Mr Granicz received a £75 ‘consolatory’ payment from DWP because it had failed to reply to his letters. Meanwhile, HMRC sent his MP two messages confirming receipt of his enquiries but providing no further information.
Nobody got to the bottom of why Mr Granicz’s large top-up payment would not be processed until This is Money asked for an investigation.
When Mr Granicz initially contacted us about his fruitless efforts to track down his missing money, he told us he felt the Government was wasting both his time and that of his MP.
‘There is no explanation. There is no answer. If I ran a business this way I would be bankrupt.’
‘I think my money is lost in the system’
Emon Martin: Paid £440 for state pension top-ups last March then heard nothing more.
Emon Martin, 62, paid £440 for state pension top-ups last March then heard nothing more.
Before making the purchase he spoke to a DWP staff member, who confirmed the amount would increase his state pension and told him it would take two or three months to process.
However, he checked his state pension forecast every few weeks and it was not updated.
The former bank manager who lives in Hertfordshire feared his money was lost in the system.
But when we raised his case, the Government found and processed Mr Martin’s top-ups.
‘I’m at my wits’ end. We have no idea what is going on’
This is Money is still trying to help readers whose cases were featured in previous stories to get their state pension top ups sorted out.
James Andrews (name changed) sent a cheque for nearly £6,400 last April which was cashed immediately but he heard nothing more.
Mr Andrews, 66, a management consultant who lives in London, had his top-ups payments processed after we raised his case and he received an apology for any inconvenience from HMRC.
He got a boost in his state pension from nearly £163 to £197 a week and arrears of just over £485.
But there was a twist in the tale, because Mr Andrews was informed by an HMRC staff member over the Christmas period that he had overpaid for top-ups and should request a £3,600 refund. However, he could still increase his state pension by paying for one extra year.
Mr Andrews took both actions on 2 January.
His wife Angela says: ‘It won’t surprise you to learn that our cheque was cashed shortly afterwards but we have not received the refund or any correspondence explaining the uplift in pension we’ve paid for.
‘I’m at my wits’ end. They keep taking our money. They fail to correspond. We have no idea what is going on. Their inefficiency and lack of transparency is a disgrace.’
This is Money has asked HMRC and DWP to investigate this case again, along with unresolved issues experienced by Pauline Kirk who featured in our last top-ups story.
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