Now state pension top-up REFUNDS go lacking too: Savers left ready months for cash owed

Savers are losing patience after long waits to get thousands of pounds of state pension top-ups refunded by the Government.

Mark George, 66, pictured below, had a letter from HMRC last April saying his National Insurance record had been adjusted to add a couple of extra years – therefore a £1,300 top-up he paid the previous autumn was no longer required.

But instead of being issued with a refund immediately, the retired prison officer from Greater Manchester spent months making futile phone calls to chase up his money.

Meanwhile, Ian Warrender, 71, whose struggle to get a £1,200 top-ups refund we have covered twice before, also saw his money get stuck in the system for months.

During the lengthy saga, he received a letter of apology from HMRC plus £200 for the delay and stress caused to him – yet still no refund.

We have been deluged by readers complaining about state pension top-ups cash vanishing after a huge rush ahead of last’s April deadline to fill older gaps in records, and also investigated some cases stretching back years.

There is apparently a separate backlog for getting a refund from HMRC if you paid the wrong amount for any reason.

Mark George was told he was owed a £1,300 refund by HMRC, which then failed to hand it over

On Budget day last month, the Government announced it was launching a review of the state pension top-ups system. 

This allows people who don’t have a full state pension record – with 35 years required to get the full amount – to make voluntary National Insurance contributions to boost their payouts.

The Government also intends to close loopholes allowing people to make contributions at a cheaper rate while living overseas, and to increase the initial residency requirement for buying them to 10 years.

This is Money has run a long campaign urging the Government to get a grip on the tortuous system, after hearing from many hundreds of readers over the years who are in despair about large sums of cash going missing.

We repeatedly hear complaints about the Department for Work and Pensions and HMRC, which run the top-ups system between them, sending people from pillar to post in their different departments and blaming each other for problems.

Therefore, we have called for the creation of one state pension top-ups department, under one boss and staffed by people drawn from both DWP and HMRC who together can deal with the entire process.

In response to the latest cases we have flagged, a Government spokesperson said: ‘We are sorry for our delayed response to customers and have worked to put this right.’

Refund request lost in the system at HMRC

Mark George grew increasingly frustrated after being told he was owed money by HMRC, which then failed to hand it over and fobbed him off when he rang to find out what was going on.

He learned last April that HMRC had adjusted his NI record for 2021/22 and 2022/23 so these years were now full, and he hadn’t needed to spend £1,300 on top-ups the previous October after all.

‘I responded to their letter immediately giving my bank details where I wanted the refund paying into. 

‘Since then I have had no communication from HMRC nor have I received this “refund” from HMRC,’ he told This is Money.

‘I have tried calling them on several occasions and have got through to them twice. 

‘They confirmed receipt of my response and said, on the first time that I managed to talk to them that my refund would be looked at and actioned in September of this year.

‘In September after hearing nothing I called again. This time I was told it would be October before my refund would be processed. 

‘It is now October and still nothing from HMRC. Where do I go from here? Who do I complain to? And how do I get this refund issued?’

When we asked HMRC to investigate it said the delay was as a result of Mr George’s refund request being allocated to the wrong workstream, and it apologised to him and paid the money.

Mr George told us: ‘I just want to thank you for all your efforts and hard work, without which I doubt I’d have seen anything from the HMRC well into 2026 and beyond.’

A letter of apology plus £200 arrived – yet still no refund

Ian Warrender paid nearly £1,200 for state pension top-ups in October 2024, 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. 

It’s a confusing trap many have fallen into over the years.

As we covered in two previous stories, the retired architect from Hampshire wrote to HMRC asking for a refund in February, and repeated this request by phone and email many times but got nowhere.

After This is Money raised his case it got passed to the complaints department, and following an exchange of emails about his situation, Mr Warrender was told a transfer had been made to his bank account.

However, it did not arrive and when he protested HMRC told him ‘Banking have confirmed that there have been no problems with sending the repayment’, advised him to contact his bank to trace it, and said if he disagreed with the outcome of the investigation he had to make another complaint.

A furious Mr Warrender told us: ‘They say I have been paid – but my bank statements prove this is not the case. 

‘How does my bank trace a payment that has not been paid or has gone to someone else’s account – who in all probability will not return the money.

‘It is only HMRC who will have a record of the account it was sent to and they have told me to restart the complaint if I disagree with its investigation. 

‘This email is an appalling response – especially to an older person adding yet more stress to a case that has been dragging for a year next month.’

When This is Money pressed HMRC for a further investigation, it found out Mr Warrender was incorrectly told it had issued his refund, when in fact the payment was on hold because of human error.

But this was still not the end of the story, because HMRC then sent a letter of apology plus £200 for the delay and stress caused to him – yet still no refund.

Mr Warrender was forced to turn to us again for help, prompting another apology and finally the refund from HMRC.

He told us: I want to say how very, very grateful I am for all your help, support and persistence. Without your intervention I don’t think I would have seen this money again.

‘It is really overwhelming – especially after no less than one year to conclude this needless game HMRC have me put me through and [I’m] fully aware from your newspaper articles I am far from alone.’

‘If I owed HMRC this money I would be locked up’ 

Ellen Smith (name changed) saw £4,900 of top-ups go missing for nearly a year and says DWP staff failed to help her find the money.

The former office manager in an insurance company, who is 72 and lives in Hertfordshire, says she ‘double and triple checked’ the figures with the DWP before making her payment to HMRC in late 2024.

After making half a dozen calls to chase it up, she told us: ‘I am at the end of my tether and cannot believe anything anyone tells me at the Pension Service.

‘Everyone I speak to is so kind, they say it’s appalling, and they have all got a different story.’

She adds: ‘I scraped together the money. Everyone is so kind and so sympathetic like they are talking to an imbecile. 

‘Then they do nothing. It’s a lot of money. If I owed HMRC this money I would be locked up if I didn’t pay.’

When we flagged up her case, the DWP said Mrs Smith’s payment would not increase her state pension because she was resident in Canada during the years it covered, but if she moved out of the UK again the increase would be applied.

It apologised for the delays she experienced after asking for her state pension award to be reviewed.

Mrs Smith is currently considering whether to ask for a refund or not, and has contacted the Canadian authorities to find out whether they owe her a pension.

Retired nurse to get £200 compensation after £3,200 vanishes for three and a half years

A 70-year-old retired nurse whose £3,200 state pension top-up went missing for three and a half years has asked DWP for an apology, an explanation of what went wrong, and a special payment in recognition of the stress and adverse impact on her health.

Jean Sargeant, who lives in London, was driven to despair over ever seeing her money again, as we previously reported.

All her attempts to get the DWP to track down her large payment failed – one staff member even put the phone down on her – and an official letter of complaint in early 2023 was ignored.

She contacted This is Money in desperation, telling us: ‘I have chronic health conditions, some of which are exacerbated by stress. I cannot now bring myself to phone again as it is too hard.’

After Money demanded an investigation, it turned out Ms Sargeant had been misled by a letter from the DWP to buy years before 2016 that would make no difference to her state pension.

Following this discovery, it switched Ms Sargeant’s top-ups to other years, increased her state pension from £185 to £212 a week, and paid £4,400 in arrears going back to October 2021.

However, she was angered at only receiving a blanket apology via the press, and that the DWP did not say sorry to her personally for the years of worry she experienced about her missing money. It also never answered her complaint made more than two years ago.

The DWP ignored two requests by This is Money to consider redress for Ms Sergeant given the seriousness of the case – including maladministration in the advice it gave her when she bought top-ups, the long delay in resolving matters until the media got involved, the impact on her pre-existing health conditions, and the potential financial loss of savings from being paid incorrectly.

Ms Sargeant therefore contacted Julia Lopez, Conservative MP for Hornchurch and Upminster, who took up the matter with the DWP on her behalf.

She was contacted by a DWP caseworker, who asked for details of her health. But following the phone call, Ms Sargeant told us: ‘She is going to liaise with HMRC. 

‘It seems to me she is intending to pass the buck to them. She said any special payment should come from them as they had service failures. I pointed out so did the DWP but this she blustered through.

‘I am wondering if she even understands the case. The delay from HMRC was November 2021 to March 2022 when my additional voluntary contributions finally went into my account. 

‘As you know DWP then did nothing for over three years, and then only because you shamed them into paying up. 

‘The plan is for her to phone me again next week. I am sorry to say my stress levels are already up.’

After a second call with the caseworker, Ms Sargeant sent a covering letter and 19 pages of evidence requested about her medical records to the DWP. 

In a third call, she was told the DWP would award her £200 for the ‘inconvenience’ she experienced and write to her MP with its decision.

However, she has asked for a personal letter to be sent to her, and for details of the independent case examiner should she decide to appeal.

Ms Sargeant says: ‘I have very mixed feelings about the special payment. On the one hand it is better than nothing, which I expected, or the minimum £50 but still seems a bit of an insult for four years’ stress and the impact it had.’