Liz Milintacupt-Taylor: Paid £9,000 for top-ups in 2020, and could not start drawing her pension until these were sorted
Complaints about lost state pension top-ups cash continue to stream in to This is Money, despite the Government telling us this month: ‘There is no general delay in the processing of payments.’
While most problems date from the big rush to boost state pensions from around January onwards, we have also heard from readers whose payments have been stuck in the system for years.
Expat teacher Liz Milintacupt-Taylor, pictured right, paid £9,000 for top-ups in early 2020.
The 68-year-old wanted to top up her record to qualify for a state pension, which requires a minimum 10 years of National Insurance contributions.
But her retirement plans were left in up in the air after Government staff failed to respond to her pleas for help, despite her long wait to get this sorted.
After trying unsuccessfully to get her payments processed and start drawing her state pension earlier this year, she contacted This is Money from Thailand and said: ‘I’m doing online tutoring to keep afloat and unfortunately my savings are going down dramatically.
‘I have every intention of returning to the UK to live but cannot at the moment until this is near sorted out.’
In another longstanding case, retired chartered surveyor Anna Harrison paid ‘self employed’ contributions of £156 in January 2021 and £140 in October 2022 to fill gaps in her state pension record.
She told us: ‘I am becoming anxious as I will be 66 next July but I got nowhere with HMRC. When finally I spoke to a lady about it she said they had got my money but it was ‘unallocated’.’
In September of this year, Ms Harrison was told by HMRC over the phone it could take up to another 25 weeks to sort out and couldn’t be done any quicker.
This is Money got no response from the Government when we asked what efforts are being made to ensure all ‘unallocated’ top-ups payments are eventually processed, or to tackle older cases like these when they are flagged to staff.
Buying top-ups can give a generous boost to retirement income if you buy the correct years on your record, but the system was overwhelmed earlier this year when a rush of buyers jammed phonelines ahead of a crunch deadline – ultimately forcing the Government to extend it twice.
We have covered a string of cases where people paid large sums and waited months for them to be processed, without knowing if they are just in a queue or lost because they receive no receipt or acknowledgement of purchase.
A 68-year-old whose £11,500 state pension top-up cash went missing last March pleaded with Government staff for help for months but got nowhere until we intervened.
Below we cover two further cases of people who paid £6,400 and £9,800 over the spring and summer, and were still waiting for their top-ups to be sorted out in November.
Many readers report long waits to get through on Department for Work and Pensions and HMRC phonelines, getting passed from one department to the next, and receiving no help from staff.
The system is run jointly by the DWP and HMRC and so means dealing with both of them – although a new online top-ups service has been promised by next spring.
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.
A Government spokesman says: ‘There is no general delay in the processing of payments.
‘The vast majority of voluntary contributions paid result in records being updated within days, though some particular complex cases requiring specialist caseworkers can take longer to resolve.
‘A new online service to allow people to see if making voluntary contributions would increase their state pension, and then make any payments, is expected to be ready later this financial year.
‘The Government has 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.’
‘It is very surprising to see HMRC claim that there is no general issue’
Former Pensions Minister Steve Webb says: ‘It is shocking that HMRC are sitting on people’s money that has not been allocated to the relevant National Insurance account.
‘They need to be much more proactive in tracking down where this money belongs so that people’s pensions can be properly boosted.’
Webb, now a partner at LCP and This is Money’s pensions columnist, adds: ‘Given the volume of people reporting problems and delays, it is very surprising to see HMRC claim that there is no general issue.
‘If there isn’t a problem, HMRC should tell us exactly how many people are still waiting and how long they have had to wait.’
‘This is an absolute shambles. I am horrified that the Government seems to feel able to take pensioners for granted in this way
Wendy Chamberlain MP, Lib Dems
Liberal Democrat Work and Pensions spokesperson, Wendy Chamberlain, attempted to find out how many people who bought top-ups from HMRC are waiting to get them put on their National Insurance record, and was informed this could ‘only be obtained at disproportionate cost’.
But she was told the average waiting time between making a payment and having it credited to your NI record was currently 12 working days, though it could take up to eight weeks to appear ‘if there is any kind of discrepancy that causes a rejection that requires further investigation’.
Chamberlain separately asked the DWP about the backlog of cases and waiting times for the final stage, which is getting top-ups added to state pension forecasts and payments.
She was told the information was ‘only available at disproportionate cost’, and that the vast majority of voluntary contributions result in records being updated within days.
Chamberlain says: ‘The Government told me that issues with top up payments could lead to a delay of eight weeks.
‘This is either wilful ignorance or total incompetence, as evidently they are overseeing a system where it takes years of chasing to get omissions resolved, meanwhile pensioners are left out of pocket.
‘This is an absolute shambles. I am horrified that the Government seems to feel able to take pensioners for granted in this way. We need an urgent investigation, more resource and someone to finally take responsibility for this mess.’ See Chamberlain’s exchange with the Government about HMRC waiting times below.
Former Pensions Minister Ros Altmann, a long-time campaigner on pensions who now sits in the House of Lords, says: ‘There are clearly significant problems with the processes for state pension top ups.
‘Unfortunately, the complexity of the whole state pension system, coupled with the need to manually adjust people’s state pension records when extra top-up payments are made, seems to mean that those people who do want to increase their state pension payment are sometimes left waiting without knowing what has happened for far too long.
Surely there should be a system to acknowledge receipt of the person’s top up payment, and then ask them to be patient while the new amounts are worked out
Lady Atmann, former Pensions Minister
‘The DWP is now dealing with so many different problems that have arisen with state pensions and, on this issue as with some of the others, they need to interact and cross-reference with the Treasury too, so it seems people are falling between the stools.
‘There are no easy answers, but surely there should be a system to acknowledge receipt of the person’s top up payment, and then ask them to be patient while the new amounts are worked out.
‘The worry for members of the public is that they don’t know what has happened to the payments they made – and when they call it seems the Government cannot confirm anything either.’
‘My Gateway account says I will receive a reply in April 2024 – I will be almost 69’
Liz Milintacupt-Taylor paid a total of £9,000 for 15 years worth of top-ups in March, May and June 2020.
She lived in China at the time and is now in Thailand, but wants to move back to the UK.
She needed to top up her NI contributions to meet the minimum of 10 qualifying years required to receive a state pension, but her payments were never processed nor her record updated.
Ms Milintacupt-Taylor says she claimed a state pension in spring this year, and after various fruitless phone calls was told that she should have filled in a CF83 form, which she was not informed about in 2020.
She returned the form in July, along with a letter to DWP and HMRC asking for help to get her state pension record sorted out.
‘Although I am still basically expat I applied for a pension as a resident of the UK as I fully intended to come back,’ she wrote to us.
‘I have now written to both DWP and HMRC apprising them of the situation and according to my Gateway account I will receive a reply in April 2024!!! I will be almost 69 years. Not great.’
During the time This is Money was trying to help her, the expected date for a reply shown on her Government account was pushed back from April to mid-May 2024.
After we intervened in her case, Mrs Milintacupt-Taylor had 15 years added to her state pension record.
She told us: ‘I am hugely grateful for that. It was getting worrisome. A big weight is now off my shoulders so onwards and upwards.’
She now has the choice between a £110 a week state pension plus a one-year backpayment of nearly £8,700, or a higher state pension going forward.
‘The system of top-ups is clearly in some disarray’
Anna Harrison made two top-up payments of £156 in January 2021 and £140 in October 2022, but when she tried to chase them up was informed she faced a long wait.
In September this year, she was told by an HMRC staff member it would take up to another 25 weeks for her top-ups to be allocated to her state pension record.
The 65-year-old from Bristol told us: ‘She said it wasn’t possible for this to be done any quicker. I have made an online complaint to HMRC but, other than an automatic acknowledgment, haven’t had a proper response, let alone adjusting my record.
‘She said I could pay last tax year’s contribution but it feels like ‘good money after bad’.’
Ms Harrison adds: ‘You need a little bit of certainty about your future income. It is as if no one is taking control.
‘If they are swamped with work the Minister should say they need more funds. It is not right. If we owe them they come chasing us and will fine us and cause us real hassle.’
When This is Money flagged her case to HMRC, it said her payments had been allocated when she made them, but were temporarily unallocated in error in August this year. This has now been fixed and HMRC has apologised to Ms Harrison for its errors.
She says: ‘It is absolutely fantastic to get it resolved and I so appreciate your help. The system of top-ups is clearly in some disarray and I do hope that other people affected will also get a satisfactory resolution.
‘We need the media to hold a spotlight on areas of Government which are not performing – it shouldn’t be necessary but unfortunately it sometimes is.’
‘If I had been late with my tax return, I would have had a whacking great fine’
James Andrews and his wife Angela (names have been changed) grew so frustrated trying to get information from the DWP on what top-ups he should buy as he neared his 66th birthday last April that they did the sums on nine years’ worth of payments themselves.
Mrs Andrews says: ‘On several occasions James tried to call HMRC in order to find out how much he had to pay, only to be left hanging on for hours until the line cut off completely. In the event he was never able to speak to anyone.
‘So we decided to work out ourselves the amount to pay in additional contributions. We then sent a cheque for £6,387.55, with supporting text and a table showing how we had arrived at the figure, to HMRC.
‘The cheque was cashed immediately.
‘But we have since heard nothing from HMRC. When James turned 66 his state pension was paid at the lower rate as if we hadn’t made any additional contributions. And so it has continued.
‘In July we wrote to HMRC again with copies of everything we’d sent previously and a copy of the bank statement showing the cashed cheque to HMRC. We have still had no response.
‘HMRC have now sat on this for almost seven long months. Thank goodness that we have other sources of income to draw on and don’t need this money urgently. But their incompetence is really a total disgrace. Had I not paid my income tax to them they would have fined me!
‘Just imagine if I had been late with my tax return. I would have had a whacking great fine. The state pension isn’t a fortune. It’s appalling. It disgusts me.’
Mr Andrews, 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. The DWP is sending him a detailed breakdown of his state pension by letter.
‘It took me over a 100 phone calls just to get through to them’
HMRC bungled Stephen Beard’s state pension top-ups several times over.
He was wrongly asked to pay a full year’s worth instead of only for a four-week gap for one year. And he was asked to pay for another top-up that was already a full qualifying year.
STEVE WEBB ANSWERS YOUR PENSION QUESTIONS
When he later contacted HMRC again to sort out a separate top-up, his cash was wrongly allocated to some of tax years he had previously paid for.
Mr Beard, 63, a former actor and bank clerical worker who lives in Kent, realised there was a problem with his £9,838 payment made last June after his state pension forecast still came up short.
He told us: ‘I saw your article regarding the fiasco that is the state pension top up, voluntary national insurance contributions.
‘I rang the pension line and was told I needed to pay 12 years’ voluntary contributions to receive my full state pension. They gave me details, and which years to pay, which would give me a full new state pension.
‘I then had to ring another number and tell them the years I wanted to pay and get a reference number which I did.
‘I followed the advice of the Future Pension line’s instructions to the letter. It took me over a 100 phone calls just to get through to them.’
Mr Beard is still clarifying his payments with HMRC, because there is another discrepancy that needs to be cleared up.
HMRC investigated after we flagged his case, and has apologised for the confusion and promised to sort out his record.
How to buy state pension top-ups? What else does the Government say
The DWP and HMRC provided further information about processing top-up payments.
– Voluntary National Insurance contributions do not always increase your state pension. People should make sure they 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.
– People can check their NI record to see what gap years they have, how much they need to pay and by when to make a gap year into a full qualifying year. To receive a reference number for payments, they can contact HMRC.
– People who need to apply for a refund of voluntary contributions can check here: Claim a National Insurance refund.
– The Government has extra staff answering phone calls and dealing with correspondence on voluntary contributions.
– 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.
Other payments requiring manual processing, for example made by cheque, are being completed within eight weeks.
More complex cases requiring further checks can take longer to resolve, depending on individual circumstances.
– The DWP aims to update state pension records as soon as possible once notified that HMRC have allocated a payment to someone’s National Insurance record.
– If someone is already receiving a state pension, the DWP would review their claim, increase the entitlement based on the revised NI record, and pay arrears back to the date HMRC received payment.
– The vast majority of people should be able to use a new online digital service which HMRC and DWP are aiming to introduce later in financial year 2023-24, once development and testing have been successfully completed.
Guidance will be made available advising who will be able to use the new digital service, and how.
– The new service will contain information to help people decide which years they may wish to make up shortfalls on, based on which gap years are available for them to fill and the cheapest or most beneficial years to pay voluntary contributions for. People will then be able to follow the process to pay online, should they decide to do so.
