Pensioners who spent thousands of pounds to boost their state pensions have received nothing for their money since it vanished into government coffers months ago.
Hundreds of thousands of older people rushed to take advantage of a special deal – before it ran out in April – that would increase their retirement income. The offer allowed people to fill gaps in state pension records going back to 2006, rather than just the past six years.
Buying state pension top-ups can give a huge boost to your retirement income. But Money Mail has been inundated with complaints from those who dug into their savings to buy state pension top-ups yet have not seen a penny.
Some pensioners say that when they phoned up government helplines, staff informed them they faced a six to eight-month wait due to a huge backlog. One expat was told by HMRC it was trying to clear UK residents’ cases within eight weeks, but the international team was taking an estimated 61 weeks to deal with top-ups bought from overseas.
The Department for Work and Pensions (DWP) and HMRC, which run the system between them, said they were prioritising payments from people close to or over state pension age. So those under 66 can expect to wait longer for their top-ups to show up on National Insurance records or improve their state pension forecasts.
Marion Stewart, 71, a retired maths teacher from North Lanarkshire, bought a one-year top-up for £824 last December, and was told it would take about eight weeks for it to be processed – but half a year later she was still struggling to get answers from the DWP and HMRC about when her state pension would increase.
From February onwards she made around a dozen calls to the two departments, often waiting 30 minutes to an hour to be connected, and being cut off several times.
Then in April, she was told by the DWP that claims were being dealt with in chronological order and running six months behind.
Marion Stewart bought a one-year top-up for £824 last December, and was told it would take about eight weeks for it to be processed – but half a year later she was still struggling to get answers
In June, after waiting 45 minutes to speak to a DWP adviser, she says: ‘I was eventually told I am still in the queue, I need to be patient and that I will receive a letter in the post. I don’t like the way he said I have to be patient. They should have employed more people if they knew they had all these people responding.’
John Wynne, a retired electricity meter reader who lives in Denbighshire, North Wales, spent £1,442 on three years of top-ups in February. He hoped these would be included in his state pension when he turned 66 and started receiving it in April.
Just before then, he rang HMRC, waited an hour to get through and was told his payment had been processed and he should call the DWP. After it took him 40 minutes to get through to the DWP, he told us: ‘They said there is such a backlog you are looking at six to eight months before you get anywhere. They said it might come through in a week, or a month, but after six months call us. They obviously haven’t got the staff to deal with it.’
Mr Wynne, who has a job unloading deliveries for a large restaurant chain, was still waiting for his extra money this summer.
Geraldine McAteer paid £6,542 for eight years of top-ups in January, the month before she turned 66, to increase her pension from £144.73 to £197.36 each week.
Mrs McAteer and her husband, Tony, who had lived abroad a lot before retiring to Surrey, took the opportunity to fill some holes in her record well before the special deal ran out in April. They became worried when she received a letter in March about her annual state pension increase, which did not include the extra years she had paid for to boost the amount.
Mr McAteer tried to chase up the large payment with the DWP when his wife reached state pension age. After waiting for 30 minutes, staff told him the case was still with HMRC, and that due to a lot of publicity about the special deal there was a big backlog. ‘She said she would send a communication back to HMRC, but I have no evidence that anything was done,’ he told us.
When we flagged these cases with the DWP and HMRC, our readers received state pension increases and arrears covering the delays. A government spokesperson said: ‘We apologise to those who have not received the level of service they should have in these cases. When errors are made, we are committed to resolving them as quickly as possible.’
John Wynne spent £1,442 on three years of top-ups in February. He hoped these would be included in his state pension but he was still waiting for his extra money this summer
People who buy top-ups are not paid interest on back payments if they are owed. You can make a complaint and ask for a special payment for stress and inconvenience due to the delay, but if you are successful any sum received would be modest.
Steve Webb, a former pensions minister who is now a partner at consultancy Lane Clark and Peacock, says: ‘Time and again, people are left hanging on the telephone, only to be told that it could be months before their top-up contributions have boosted their state pension.’
He adds: ‘A fundamental flaw is that one government department deals with the National Insurance record and then puts you to the back of a second queue with another department, which then reassesses your pension. In the meantime you are left in the dark.’
Mr Webb says it would be more efficient if one member of staff was assigned to deal with the top-up process from start to finish.
Baroness Altmann, also a former pensions minister, says our readers’ cases are simply the latest examples of the way in which the DWP and HMRC struggle to cope with the complexities of state pension administration.
She adds: ‘The whole system is still not modernised and relies on officials to oversee fiddly details, marry up different computers and then try to pay millions of people very different amounts of money depending on what credits were assigned to them many years ago or in the recent past.’
Steve Darling, the Lib Dem work and pensions spokesman, says: ‘It is appauling that people are having to desperately chase the DWP and HMRC for these “lost” payments. The subsequent delays are also completely unacceptable.’
Is your top-up cash missing? Contact pensionquestions@thisismoney.co.uk. Unfortunately, we can’t help everyone, so we urge people to contact their MPs, too. Find yours at members.parliament.uk/FindYourMP
