State pension top-ups chaos leaves savers in limbo

Savers who paid thousands for state pension top-ups saw their money disappear without explanation into the ‘positively Kafka-esque’ system run by the Department for Work and Pensions and HMRC.

Older people have handed over up to £4,000, only to see no increase to their state pension for months or over a year, and describe being sent round in circles by government staff and left at an utter loss over what to do. 

Retired teacher Nigel Hughes, pictured right, paid around £1,600 in summer 2020, but the payment vanished and his repeated complaints and attempts to track it down were ignored.

‘The frustration of dealing with DWP is huge,’ says one retired civil servant who got caught out over a £4,000 payment. 

‘They have built a very effective brick wall around themselves.’

This is Money has covered many cases of readers struggling to get by or even forced into hardship due to state pension delays, although the DWP promised to get on top of problems by last November.

We are still hearing from readers experiencing such failures, with one 76-year-old retired charity worker making fruitless attempts to end deferment and restart his state pension payments for almost a year.

Now blunders over state pension top-ups, where older people make voluntary payments to boost their income in old age, have also emerged 

We recently reported cases where an £11,200 payment was not processed for months, and a botched 79p increase could have led to a loss of thousands of pounds during retirement.

Pensioners have long complained about the baffling top-ups system, and being sent from pillar to post when they need help because it is run by two different departments of the Government.

They now also report waiting months to prise essential information out of the Government on which state pension qualifying years will boost their payments, and what and how to pay.

Mr Hughes says that it took 10 months for the DWP to send him these details, followed by his 20-month wait for an increase that was not resolved until This is Money took up his cause.

However, the DWP has only backdated his payments for the second phase of this delay.

‘It does seem very inefficient having pensions administered by two separate departments with very little cooperation between the two,’ says Mr Hughes, who received arrears of £870 and a state pension increase from around £143 a week to £154 following our intervention.

‘When, as in my case, something goes wrong, you don’t know where the problem has occurred, and communication with both is difficult and slow.

‘Clearly letters are not dealt with promptly, or at all. A reform of the system is needed to make it fit for purpose and make communication between all involved easier.’

The 68-year-old, who lives in Herefordshire, adds: ‘I would like to thank you for taking my case on and bringing it to a successful conclusion. It is unfortunate that it seems the public can only achieve results by involving the press.’

Former Pensions Minister Steve Webb, who is This is Money’s pensions columnist, says it can be very confusing for people to know who to contact about top-ups, because National Insurance contributions are handled by HMRC whilst state pensions are worked out by the DWP.

Webb, now a partner at consultancy firm LCP, says of the failures in the cases we highlight today: ‘People who want to top up their state pension are given the run-around.

‘For obvious reasons people ring the DWP about their state pension but it seems that often it is delays at HMRC which are the initial problem.

‘It cannot be right for the Government to sit on thousands of pounds of people’s money for months or even years without boosting their state pension. Further delays are then caused by slow processing at the DWP end.

‘Meanwhile, anyone who rings up speaks to a different person each time who often knows nothing about their case, cannot see their full records, and promises action which doesn’t materialise.

‘The whole system is positively Kafka-esque and needs a shake-up.’

A DWP spokesperson says: ‘All of these cases have now been resolved and we are sorry for any inconvenience caused.

‘There were various reasons for these claims not being processed, most of which were beyond our control.’

‘I seem to be going round in circles’: Top-ups chaos suffered by savers

People left in limbo over after shelling out hundreds or thousands of pounds to increase their state pension have condemned their treatment at the hands of DWP staff.

Karen Reed (not her real name) spent more than £500 in June last year to fill two incomplete years of National Insurance contributions.

She told us: ‘I have made a number of calls to the helpline, each time being assured my case would be looked into, but nothing has happened. A month ago I sent a letter of complaint with proof of the payment sent via my bank. I have not yet received a response.

‘Consequently when I started receiving my pension at the end of January this year it was at the lower rate, although I was advised making this top-up payment would increase it by just over £10 per week.

The 66-year-old former secretary, who lives in Kent, approached This is Money for help saying: ‘I am now at a loss as to what further action to take to get this matter resolved.

‘It is so frustrating. I spoke to someone on one occasion, who seemed helpful, in the accounts department. When I rang back, I was told “We don’t have an accounts department”. I seem to be going round in circles.’

As in other cases, Ms Reed appears to have experienced a double failure involving both HMRC which had not processed her payment, and the DWP which did not act on her complaints.

When we raised her situation with the DWP, a spokesperson said: ‘Once we received notification from HMRC that Ms Reed had paid voluntary National Insurance Contributions, we reviewed her state pension claim, paid the arrears of £98.20, and increased her state pension from £170.91 per week to £181.49 per week.’

After her case was resolved, Ms Reed told us: ‘A big thank you to yourself and your team for your help with this. It should not be this difficult for individuals to receive the correct pension they are owed. I have no doubt I would still be waiting, phoning and getting nowhere without your input.’

‘I no longer believe anything I’m told by DWP’: Calls record and £4k of top-ups go missing

The DWP took six months to inform Adam Cooper (not his real name) what top-ups he needed to make to boost his state pension after he asked for the information when he turned 66 last summer.

‘I made several calls to them and each time I was told that there was no record of my previous contacts and that someone would be in touch about it in six to eight weeks,’ says the former civil servant, who lives in Merseyside.

‘One adviser did say that she would send an urgent email and that I would hear something in a week. Needless to say I did not. A complaint forwarded by my MP was ignored.

‘Eventually I complained to the Minister directly and I received a letter which said they had no record of my calls at all.’

After being notified of what he should pay in January, Mr Cooper handed over £4,000 to boost his state pension by around £26 a week, but then heard nothing more.

He contacted This is Money, and told us: ‘I made a Freedom of Information request for recordings of the calls I made and despite having been told that they did not exist I have received a CD containing some of them. Apparently the others will have been deleted but I no longer believe anything I am told by the DWP.

‘I escalated my complaint to the Independent Case Examiner. I am fortunate that I did receive my pension on time but it has taken over nine months to sort out what I would think is a straightforward enquiry.’

As in the case above, when we asked the DWP what had happened to Mr Cooper’s top-up payment it appeared to have got lost at HMRC’s end.

A DWP spokesperson said: ‘Once we received notification from HMRC that Mr Cooper had paid voluntary National Insurance contributions, we reviewed his state pension claim, paid the arrears of £1,022.73, and increased his state pension from £143.63 per week to £169.29 per week.’

Mr Cooper told us: ‘I am under no illusion that this would not have happened without your intervention so I am most grateful to you for doing this for me.’

‘I sympathised with DWP staff on frontline’: But 66-year-old lost patience after year-long wait

The DWP sat on £4,000 of state pension top-ups for over a year and ignored the efforts of Janet O’Callaghan to find out why she hadn’t received an increase worth around £25 a week.

She made the payment in February 2021, a few months before she turned 66.

The former pension administrator from Northamptonshire says DWP staff gave her various reasons for the delay, and when at the beginning they told her it was down to making furlough payments and Covid sickness she accepted that.

But she adds: ‘I don’t understand it because the last time they said there was a backlog but gave no real reason. There have been two state pension increases since I paid for top-ups. This will change my tax code. The longer it goes on the more of a mess it makes.

‘I haven’t chased this particularly hard with the DWP because I am lucky enough to also receive an occupational pension, and considered others who are less fortunate to be in greater need.

‘I also sympathised with DWP staff who are on the ‘frontline’ of grievances and I suspect are ‘firefighting’ as more issues are coming to the forefront. However, 12 months is a long time to wait with no end in sight.’

In this case, the DWP apparently made a blunder not HMRC.

Ms O’Callaghan received a personal call from a DWP staff member, and subsequently told us: ‘They have acknowledged that my NI record had been updated but they could not offer any real explanation as to why my pension top-up had not been processed – it had somehow slipped through their net.’

A DWP spokesperson said: ‘We apologise for the delay in reviewing Ms O’Callaghan’s state pension award after receiving notification from HMRC about her voluntary contributions. We have issued arrears of £1,357.10 and increased her state pension from £144.38 to £170.83.’

Ms O’Callaghan told us: ‘I cannot thank you enough for taking this up on my behalf. I can’t help but wonder how many other cases there are still waiting for resolution.’

A 76-year-old’s attempts to end deferment went ignored for a year

Older people living overseas or trying to end state pension deferments have previously complained to us of long delays in getting payments sorted.

Hugh Gibney, 76, lives in County Meath in Ireland and has been trying in vain to get his state pension restarted since last spring.

He had previously received state pension for five years, as a result of building a National Insurance record when he worked in the UK, but paused his payments in 2016.

Mr Gibney initially wrote to the DWP to request his payments start again but received no response. In his second attempt, he submitted a claim but then heard no more.

After writing three letters to the DWP asking what had happened – including one sent by registered delivery to the Work and Pensions Secretary Thérèse Coffey – and getting no response, he contacted This is Money.

When we raised his case, the DWP said: ‘Once we received confirmation from Mr Gibney regarding the date he wished to reinstate his state pension, we were able to issue 26 weeks of arrears of £3,195.00, covering the period 05/10/2021 to 04/04/2022, and reinstated his state pension at £126.57 per week.’

It issued a separate letter informing Mr Gibney about his choice to receive either extra weekly state pension or a lump sum payment as a result of his five-year deferral.

‘This situation is absolutely disgraceful’: Expat’s pension three months late

Carole Ellis, who lives in Cyprus, turned 66 in January but was still waiting for her state pension to start three months later.

She contacted the International Pension Centre four times, but told us: ‘Nobody can tell me anything apart from ‘I’ll expedite the matter’!

‘My bank account is UK based and I am fully paid up with my contributions. The first person I spoke to said there is absolutely nothing wrong with my claim but they are very busy and have a backlog of six months.

‘Will my pension be backdated? This situation is absolutely disgraceful. I tend to phone their helpline every other Monday, and have now started to take names.’

The former administrator for a recruitment company says she had one ‘quite helpful’ conversation with a DWP staff member ‘but as usual they don’t really know what’s going on’.

When This is Money intervened, the DWP issued Ms Ellis with arrears of around £3,100 and started paying her state pension.

A spokesperson said: ‘We regret there was a delay in DWP processing Ms Ellis’s claim.’

Pensioner says he informed HMRC and DWP he was in Vietnam, but his pension was suspended

David Bradley, who lives in Vietnam, had his state pension stopped last month and experienced trouble getting it restarted despite texting, writing and calling the DWP and HMRC.

The 69-year-old, who told us he and his wife are heavily dependent on the state pension, says an important letter from the DWP about his circumstances failed to arrive.

Mr Bradley says he informed HMRC some time ago that he was living in Vietnam, where state pension payments are frozen, but it had apparently not passed the information on to the DWP.

He adds that he also told the DWP where he was living about three or four weeks ago.

‘Due to Covid we were unable to return to the UK since March 2020 until this year. I shall be travelling back to the UK next month,’ he says.

When we raised his case with the DWP, a spokesperson said: ‘Mr Bradley failed to notify the DWP of his move to Vietnam and as a result his state pension was suspended.

‘We’ve contacted Mr Bradley and recorded his temporary address in Vietnam, reinstated his state pension and issued arrears of £1,529.12 covering the period 11 February 2022 to 7 April 2022.

‘Mr Bradley’s state pension will continue to be paid at the weekly rate of £202.64 whilst he temporarily resides in Vietnam.

‘It’s important to note that it’s the responsibility of Mr Bradley to inform DWP of any change in his circumstances; this forms part of the claims declaration which Mr Bradley would have agreed to when he made his claim.’