Pensioner advised ‘be affected person and wait’ over £15k state pension top-ups fee

A 66-year-old who handed over a £15,000 state pension top-ups payment months ago says he feels let down by the ‘chaotic’ system.

Christopher Dehn, a retired business owner who lives in Portugal, rang the Government twice after his payment in November, but says staff told him ‘be patient and wait’.

He then contacted This is Money, saying: ‘I am now worried that this large sum has become “lost”.’

Britons are rushing to send payments to the Government ahead of a 5 April deadline to buy missing years as far back as 2006, after which you can only backdate six years.

But This is Money continues to receive a stream of complaints from readers about long waits after they hand over cash.

Mr Dehn says: ‘I believe that my payment should have been acknowledged when it was received and I question the financial ethics of taking £15,000 from a pensioner and giving no return on it for four months. It seems somewhat dishonest.

‘I am not, sadly, in good health and I was relying on the increased monthly payments to help towards my medical expenses here in Portugal, but the reality is that now I have neither the £15,000 nor the increased payments.

‘A lose, lose situation for me and a win, win situation for the Government. Hardly fair I feel.’

After he received official confirmation he could buy 18 years of top-ups and paid for them, Mr Dehn says: ‘Needless to say the cheque was paid in very swiftly. 

‘The form which accompanied the cheque was correctly filled in in complete accordance with the instructions.

‘I am now worried that this large sum has become “lost” in the apparently chaotic system which, I think, is letting me down.’

Former Pensions Minister Steve Webb, now This is Money’s retirement columnist, says: ‘Those who administer the system need to understand how it feels to be on the other side.

‘The lump sum payments which many people are handing over can represent a large chunk out of their savings, and all too often it feels as though the money has gone into a black hole, with no indication that things are progressing and no timetable to see National Insurance records updated and state pensions increased.’

Webb, who is a partner at pension consultant LCP, adds: ‘It cannot be efficient for HMRC and DWP to have to handle repeated calls from people chasing up what has happened to their money.

‘Employing more people to process the payments and seamlessly upgrade state pensions would almost certainly be more cost effective than employing call handlers who aren’t really in a position to know what is going on.’

After This is Money flagged Mr Dehn’s case to the Department for Work and Pensions and HMRC, he received an email just over three hours later which said: ‘His Majesty’s Revenue and Customs have allocated your voluntary contributions.

‘I have revised your state pension today and issued the arrears we owed to you. This will be credited within five working days. I have also posted your new entitlement notice to your postal address.’

He has now received a backpayment of around £2,000, and his state pension has been hiked from £64 a week to £176.96.

Mr Dehn told us: ‘I have no doubt that your kind intervention solved my problem and I am most grateful to you for helping me. Thank you.’

The DWP and HMRC, which run the top-ups system between them, were asked for comment but did not respond by the time of publication.

Should YOU buy top-ups by 5 April to increase your state pension?

Buying top-ups can give a generous boost to retirement income if you buy the correct years on your record.

This is Money’s guide to buying state pension top-ups explains the cost and offers six golden rules on deciding if you should fill gaps by Steve Webb.

Most people can use the Government’s online state pension service to check if it is worth buying missing years and to make payments, or the HMRC app.

But some are not allowed to use this online tool, including people already over state pension age, those self-employed in any of the years they are trying to pay for, and those who lived abroad in the years they want to fill up now (other excepted groups are listed here).

The Government has softened the 5 April deadline on its special offer to buy years going as far back as 2006 – there are now two ways to beat it.

Phone gridlock forced the Department for Work and Pensions to launch a phone callback system for people living at home or abroad.

Lodging a request before 5 April means even if you don’t hear back from helpline staff before that date, you will still be able to buy missing years going as far back as 2006.

The Government advises saving a screenshot of the confirmation message.

You can also get more time to make payments by logging into your National Insurance record.

If you currently click ‘view details’ on any years for which you might want to make voluntary contributions from 2006/07 to 2016/17, you automatically get another month to pay.

Using this little-known trick means if you do this for example on 4 April, you will be given until 4 May to pay.

It is unclear how long the callback service will remain available, and This is Money is trying to establish this.

People wanting more breathing space to buy top-ups should therefore make a callback request now, or click on ‘view details’ on years they might want to buy on their NI record, or do both.

In the jointly-run top-ups system, HMRC is responsible for maintaining National Insurance records, which you must check for gaps in your state pension records, and processing top-up payments.

The DWP is in charge of revising state pension forecasts or payments after purchases.

It is worth knowing which department does what, so you know who to contact if necessary during the process, or later if anything goes wrong.