State pension top-ups are in dire need of an overhaul by DWP and HMRC, says TANYA JEFFERIES

Buying top-ups can be a good value way to boost your state pension, but it is a torturous process.

Many people experience long delays just to get to the point of making a payment, then suffer the stress of large sums going missing and for all they know getting lost for good in the system.

A retired taxi driver who saw £11,500 vanish for seven months is the current record holder in financial terms, while others have seen thousands of pounds go missing for years on end.

Just in the past week we have heard from people whose top-ups payments in 2020 and 2021 have still not led to any increase in their state pensions, or any explanation of why not or a refund. 

We plan to investigate these and the many other serious cases that stream in to our inbox (see below for how to get in touch).

The voluntary contributions system has been in a state of rolling chaos since the start of this year, and judging by the volume and content of recent readers’ messages, there is still no sign the backlog is getting cleared. 

The Government is planning to launch a new online state pension top-ups service by spring at the latest, which could help new buyers (we will have to see) but does not assist people with delays right now.

Savers are furious about top-ups mayhem

This is Money was the first to reveal in February that Department for Work and Pensions phonelines were overwhelmed as savers rushed to fill old state pension gaps before a special deal ran out in April.

The now extended concession allows people fill up or buy extra years going back to 2006/07, rather than just six years as usual.

That can be well worth doing, but an entirely predictable rise in demand caused mayhem in the already convoluted top-ups process, which is run jointly between the DWP and HMRC.

People have to work out which years to buy, which is not straightforward due to rule changes which make filling some gaps worthless. The Government advises people to check with the DWP, and obtain a reference number from HMRC before making a purchase.

HMRC then takes in the extra contributions and updates National Insurance records, before a case passes back to the DWP which recalculates state pension forecasts or payments.

So, there was turmoil when savers jammed phonelines ahead of the crunch deadline to buy top-ups for earlier years, ultimately forcing the Government to push it back twice. It’s now April 2025, after the next election.

But months later, readers continue to complain about long phone waits, and no help forthcoming from staff if and when they finally get through, and meanwhile there appears to be a bottleneck in processing top-ups and updating forecasts or payments.

The Government’s line is that the vast majority of state pension voluntary contributions result in records being updated in days, though more complex cases can take longer.

But this is belied by the sheer number of This is Money readers who report problems at every stage of buying top-ups. And it is unclear why some of them have run into problems, because they checked sums are correct with DWP in advance, and paid by bank transfer using their HMRC reference number.

Many tell us they scraped together the money to buy top-ups, or received gifts or loans from family. It’s understandable that anyone who hands over cash gets distressed at receiving nothing in return. Even what looks like a small sum can represent a large chunk of someone’s savings.

They don’t get a receipt or any acknowledgement of payment, and many say calls for information to DWP and HRMC phonelines prove a waste of time.

A few people have written in to tell us their top-ups got sorted after they simply waited it out, or they got their MP involved – the latter is a good idea, as it can get things moving and make more politicians aware of the problem.

However, some older cases seem to have got stuck indefinitely until This is Money flags them to the DWP and HMRC and forces the issue. It is a terribly bad sign if staff are so busy that cases that might take a bit of time and effort end up in a ‘too hard’ pile, no matter the potential hardship caused to any individuals affected.

Many readers who come to us, desperate and miserable at the disappearance of their cash, subsequently tell us of their huge relief when it is finally located, and their certainty this would never have happened without our help.

We need ONE state pension top-ups department

The confusing state pension top-ups system is in dire need of an overhaul, which This is Money and our sister publication Money Mail first called for five years ago.

This was after we covered numerous cases of savers who innocently bought worthless top-ups, but HMRC had spent months refusing to give anybody their money back. We forced HMRC to back down and it started routinely issuing refunds.

A new online service which will let people check which years to top-up and pay on the spot is in development and due for launch by the spring. 

This will be welcome if it works. There will still be a phoneline service as well, but there is much room for improvement there.

How to fix the top-ups system for good 

Here are some other suggestions to improve the state pension top-ups process for savers.

1) Create one state pension top-ups department, under one boss, that deals with the entire process from start to finish, whether online or offline. Instead of shuttling cases back and forth between the DWP and HMRC, merge all teams working on the task.

2) Find out where the current worst delays are happening, which would be easier if there weren’t two departments that can blame each other, and then sort out the bottlenecks.

To try to work out what is going on, This is Money has asked many times about the current time delay between making voluntary state pension contributions and HMRC adding them to an NI record, and separately the delay between getting the contributions added and having a state pension forecast updated by DWP.

We have also asked how many people are currently waiting for NI records to be updated by HMRC, and how many have had this done and are waiting for state pensions to be updated by DWP. If the two departments know this information, they haven’t told us.

3) Revamp the call centre operation so people who ring up about top-ups receive help with their problem, whether it is finding out how much to pay, or what has happened to their money months on.

It’s understandable not to have your best and most experienced staff picking up the phones, but there should be an effective filtering system so all queries are dealt with, while the most serious issues are sent up the line.

If this is the system that is already meant to exist, the overwhelming feedback we get from readers is that it is not working.

Again, one top-ups call centre rather than having to call different numbers for HMRC and DWP would be useful. 

4) Do a sweep for the oldest complaints about top-ups, however intractable they might look, and get a trouble-shooting team onto them.

The Government has mentioned it has ‘specialist caseworkers’ in responses to us, but we continue to hear from people whose cases have dragged on for a year or more, so they must be ineffectual, overworked or both.

In June, we intervened on behalf of an army veteran who had paid nearly £5,000 in spring 2022, and was still waiting for his top-ups to be processed a few days before he turned 66 and qualified for his state pension.

State pension scandals are a stain on DWP record

The DWP needs to get its act together after endless scandals, including widespread underpayments to elderly women, other women wrongly refused state pensions, and new claims falling way behind and causing hardship and even hunger at one point.

Not all these issues were the fault of former Pensions Minister Guy Opperman, but there was a lamentable failure on his part to get on top of some fundamental problems during his five-year stint in office, while he occupied himself with setting up a ‘midlife MOT’ website and an as yet still unfinished pensions dashboard.

Laura Trott replaced him a year ago, and while she has at least promised to fix the child benefit and state pension credit mess, the top-ups system appears to have descended into worse chaos on her watch.

Both Labour and the Liberal Democrats have condemned this debacle. Whether there is a new Government or the current one is re-elected at the next election, let’s hope they take a fresh look and address some longstanding problems with how state pensions are administered.

That would earn the huge gratitude of older people, who just want to be confident their pensions are correct and a competent department can handle any payment issues that arise.