Tag: state pensions

£35 million added to State Pension pots

  • Only two months left to boost State Pension by filling gaps in National Insurance records from 2006 onwards
  • Since the launch of the digital service last April, 37,000 people have topped up more than 68,000 years, worth £35 million

People wanting to maximise their State Pension by plugging gaps in their National Insurance record have contributed to a total of 68,673 years, worth £35 million, using the online service since April last year HM Revenue and Customs (HMRC) has revealed.  

Analysis of the digital service has shown:

  • more than 37,000 online payments have been made through the service
  • 65% of the years topped up by customers are from 2017 onwards 
  • the average online top-up payment is £1,835
  • the largest weekly State Pension increase is £113.76

HMRC and Department for Work and Pensions (DWP) are reminding customers they only have 2 months up until 5 April to check their National Insurance record and fill any gaps from 6 April 2006 onwards.

From 6 April 2025, people will only be able to make voluntary National Insurance contributions for the previous 6 tax years, in line with normal time limits.

The Check your State Pension forecast service on GOV.UK is the quickest and easiest way customers can check what their pension will be in retirement and take action if they need to. People can also use the HMRC app to check their State Pension forecast.

Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive, said: “There are just 2 months left to check and fill any gaps in your National Insurance record from 2006 onwards to boost your State Pension entitlement.

“Don’t delay – it is quick and easy to check your National Insurance record on GOV.UK and it could help your finances in retirement.”

Since the launch of the enhanced digital service in April last year, more than 4.3 million people have used it to check their State Pension forecast.

The end-to-end service means customers can also use it to check and view gaps in their National Insurance record, calculate the difference any payment will make to their State Pension and then make one payment for however many years they need to top up.

Everyone should be aware of the risk of falling victim to scams and should never share their HMRC login details with anyone. HMRC scams advice is available on GOV.UK.

State pension ‘shameful shambles’

“Shameful shambles” of DWP’s long term underpayment of state pensioners with “little interest” in consequences

The Department for Work & Pensions (DWP) estimates it has underpaid 134,000 pensioners, mostly women, over £1 billion of their State Pension entitlement, with some of the errors dating as far back as 1985.

In January 2021, DWP started an official exercise to correct the errors, the ninth such exercise since 2018.  The errors, which mostly affect widows, divorcees and women who rely on their husband’s pension contributions for some of their pension entitlement, happened because of the Department’s use of outdated systems and heavily manual processing.  Small errors that were not recognised each time added up over years to significant sums of money.  

DWP will only contact pensioners when it finds through these exercises that they have been underpaid, and admits that many more are not receiving their due – these “risk missing out on significant sums”, with “little guidance for those currently claiming State Pension who are concerned that they have been underpaid” and people left “in the dark over their entitlement”.  

There is currently no formal plan for contacting the next of kin where a pensioner who was underpaid is now deceased. 

DWP is only paying those it has identified as having a legal entitlement to arrears, in some cases many years after the event, and has been inconsistent in paying interest. It has shown little interest in understanding the further knock-on consequences, including on social care provision, for those it underpaid.   

Fixing DWP’s mistakes itself comes at great cost to the taxpayer – expected to cost £24.3 million in staff costs alone by the end of 2023. Experienced, specialised staff have been moved away from business-as-usual and as a result DWP is already experiencing backlogs in processing new applications.

The risk remains that the errors that led to underpayments in the first place will be repeated in the correction exercise, if not also in new claims.  

Dame Meg Hillier MP, Chair of the Public Accounts Committee, said: “For decades DWP has relied on a State Pension payment system that is clunky and required staff to check many databases – and now some pensioners and the taxpayer are paying in spades.  

“Departments that make errors through maladministration have a duty to put those it wronged back in the position they should have been. In reality DWP can never make up what people have really lost, over decades, and in many cases it’s not even trying. An unknown number of pensioners died without ever getting their due and there is no current plan to pay back their estates. 

“DWP is now on its ninth go at fixing these mistakes since 2018, the specialised staff diverted to fix this mess costing tens of millions more to the taxpayer and predictable consequences of delays in new pension claims. And there is no assurance that the errors that led to these underpayments in the first place will not be repeated in the correction exercise.  

“This is a shameful shambles. The PAC expects DWP to set out the step changes it will make to ensure it is among the last.”