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EXCLUSIVE State pension top-ups vanish 'in the ether': DWP and HMRC boost staff to deal with backlog
Frustrated This is Money readers continue to complain of state pension top-ups cash vanishing 'in the ether somewhere' as the Government contends with a big backlog of cases.
The Department for Work and Pensions and HMRC, which run the system between them, say they are prioritising payments from people close to or over state pension age.
This follows a huge rush ahead of an April deadline to fill old gaps in state pension records.
But retired aerospace administrator Garry Wakefield, 67, saw £7,400 he paid for top-ups in March go missing.
He also claimed his deferred state pension in the same month, because he and his wife have just retired to Spain, but was left hanging with no word on when his payments might start.
Retired air traffic controller David Kirkwood, who lives in Ayrshire, turned 66 in May while a £3,200 top-up made last November remained unaccounted for on his record.
Elaine Bowden, a 65-year-old retired microbiologist from Merseyside who handed over around £5,000 last November, is due to get her state pension in August.
She told us: 'They have still got my money somewhere. I could have had interest on the money for all that time. It's a disgrace.'
None of these delays were addressed until This is Money urged action on the Government, and nor were other cases highlighted below of top-ups cash going missing for up to a year.
A government spokesperson said: 'We have allocated all of these customers' top-ups to their National Insurance records and are sorry for the delay.
'We're tackling response times by deploying extra staff to process payments.'
But former Pensions Minister Steve Webb responded: 'Whilst these sums are small to the Government, they are large to the individuals concerned.'
He told us: 'It is time that the whole system was brought into the 21st Century.
'We are always told that technology is going to streamline all of this, but for too long people have to resort to the old fashioned approach of hanging on the phone to try to find out what is going on.'
Webb, who is now This is Money's retirement columnist and a partner at LCP, said of the readers' experiences we cover today: 'Yet again we are hearing of case after case where people have found it impossible to find out what is going on.
'They struggle to get information on the phone or are promised action which never seems to happen.
'The system is so complex that people need to be able to access a clear and straightforward explanation about what is going on and when they can expect to see their record updated.'
A deal to buy voluntary state pension top-ups going back to 2006/07 ended on 5 April - although you can still backdate for the past six years.
The DWP launched a callback service, which is now closed, to handle the volume of enquiries. If you signed up you should be contacted to discuss your situation, and still be able to buy top-ups for earlier years.
If you are over 66, you will receive state pension arrears going back to the date of your top-up payment in addition to your increase, so you will not ultimately see a shortfall.
> Should you buy top-ups to boost your state pension? Read our guide.
HMRC 'lost' £6k of my money
David Kirkwood made two payments totalling thousands of pounds last November to boost his state pension, but only one was processed before his 66th birthday this spring.
'It certainly looks like they have lost my payment,' he told us. 'When you eventually get through to HMRC by phone, they have been very helpful and polite but it does take a long time getting through.'
A separate tax payment of nearly £3,000 he made in January 2024 had already gone astray and he had no luck tracking that down either.
'Once again the person I spoke to - after an hour listening to horrible music - was very helpful,' he said of his experience contacting HMRC in March.
But he heard nothing more after that, and told us: 'To sum up, it would appear that HMRC have "lost" £6,217.21 of my money.'
After we flagged his case, the DWP straightened out Mr Kirkwood's state pension.
But despite HMRC saying his tax account was now £24.37 in credit and a penalty payment had been waived, he is still waiting for these issues to be finalised.
Garry Wakefield postponed taking his state pension for nearly a year after his 66th birthday, but decided to get his payments started when he moved to Spain earlier this year.
However, neither his state pension claim nor £7,400 of top-ups bought in March were processed by DWP and HMRC.
Originally from Lancashire, Mr Wakefield had worked in the aerospace industry in Bahrain since 2010.
He contacted us, saying: 'My wife and I moved to Spain very recently. We have some money for now but it is coming to the point where my state pension is needed.'
Once we got involved, his state pension was sorted out and he was refunded around £4,300. He told us: 'The system is so complicated it's ridiculous.'
'I am thinking of going to their head office and confronting them'
After paying £5,000 for top-ups last November, Elaine Bowden thought they would be added to her record well in time before she reached state pension age in August.
By this spring she was growing concerned, and contacted This is Money after she failed to get a response to a letter to HMRC.
'I go into and all the information is still saying that I have the same gaps before the top-up payment,' she told us.
'I have spoken to my bank and the money was sent to them. I have records of the transaction.
'I am thinking of actually going to their head office and confronting them. Maybe anyone who is in the position as myself should join me. I don't know what else to do. If I don't get the top-up I will be struggling to pay bills.'
After we raised her case, HMRC allocated Ms Bowden's top-up payment and DWP confirmed her new state pension forecast.
She said: 'Thanks for all your help. My pension gaps have now been filled and I get the full amount. I can't thank you enough.'
'Trying to get through by phone and webchat is just impossible'
We have covered many cases of large sums getting lost in the state pension top-ups system for months and even years, but people have struggled to get Government staff to help on their own.
In our latest investigation, we uncovered further failures.
- Ran Marshall, 61, paid just over £5,000 for state pension top-ups last September.
The army veteran, who served in the Parachute Regiment, now lives in Greece with his wife and teaches scuba diving
He said: 'Despite various web chats and a call, all times being told it would be sent to the team dealing with this, the money still has not been credited to my NI account.
'This does seem an incredibly long time for this amount of my money to be sitting nowhere. Trying to get through by phone and webchat is just impossible.
'I understand there is a backlog and I am not pension age but they told me eight weeks and I gave them a large sum of money. I could be earning interest on it. It's in the ether somewhere.'
After This is Money contacted the Government on his behalf, Mr Marshall's NI record was updated and his pension forecast was revised.
He said: 'How can we ever thank you? I'm quite astounded that after nine months of calls and mails from us, you have fixed the whole thing in two days.'
- Anne Weekly, 62, a freelance English teacher who lives in France, bought 17 years of top-ups for nearly £2,800 in May 2024.
After a year waiting for her NI record to be updated, she suddenly saw two years she had not purchased appear as fully paid up.
When we alerted HMRC and DWP, it turned out the system had incorrectly 'auto-allocated' some of her payment to the wrong years.
'I'm in shock! You've sorted the issue for me,' Ms Weekly told us when her NI record was fully updated. 'I can't believe how quickly they reacted. You must scare the life out of them.'
- Ian Warrender, 71, paid nearly £1,200 for state pension top-ups in October, not realising they wouldn't improve his state pension.
This is because following an overhaul in April 2016, some people have already maxed out any possible benefits by that point, and it is only worth filling in years following the changes.
The retired architect from Hampshire wrote to HMRC asking for a refund in February, but received no response.
HMRC said it had provided Mr Warrender with payment details last autumn but advised him to contact DWP first to check if his top-ups would increase his state pension.
He is currently waiting for a letter from the DWP which will explain how to boost his state pension by buying top-ups for years between 2016 and 2019 instead.
- Caroline Simpson (name changed) was left in limbo for months when staff at four different Government departments and agencies failed to confirm whether she was eligible for National Insurance credits between 2021 and 2024, or needed to buy top-ups for that period.
Ms Simpson, 67, a former self-employed live-in carer from Herefordshire, contacted DWP's pensions and Universal Credit departments, HMRC and her local Job Centre
After we asked for her case to be investigated, the DWP said her income from periods when she was self-employed during the years in question took her above the threshold to receive NI credits. It added that it had communicated this to Ms Simpson, which she disputes.
