Help! HMRC has delayed updating my state pension record with top-ups

Delays: HMRC has failed to update my state pension records, which is due to start in August

I am forwarding you an email I sent to Jim Harra, chief executive of HMRC, on 30 May. Needless to say I have had no acknowledgement or reply. 

I’m sure there are lots of people in my situation. My last phone call to HMRC cost me over £6, and I’m still waiting on it. Are you aware if any action is been taken against HMRC?

Mr Harra, I’m writing to you out of sheer frustration with the service I have received from HMRC and subsequently DWP.

In August this year I will be eligible to receive my state pension. As the majority of my working life was prior to 2016 I am entitled to the lower rate.

However, I can buy added National Insurance years to bring me close to the new state pension. I have been in contact with the DWP in the first instance to confirm the amount. That’s where the issue started.

As I have been looking after my grandchildren I was advised to apply for the Specified Adult Childcare Credits. I duly posted my application as requested by HMRC and it was received by the department in early January 2023.

On 12 January I spoke to HMRC who confirmed that it had received it, and it would be processed by 4 May. This date came and went and I had received nothing so on 15 May I again called HMRC. It informed me that the delay with processing applications was now an additional 23 weeks, and it was were only just starting on applications received in September 2022.

Whilst I’m aware that because of the HMRC backlog the NI contribution increase is delayed until 23 July, the new backlog takes me beyond that date.

I made the decision to pay the extra NI on the 16 May (a sum of over £4,000). To date I have received no acknowledgement of this amount and my records have not been updated.

In the meantime I have applied for my state pension. Needless to say the amount is based on my contributions before I paid the additional years.

The DWP advised me that there is nothing they can do about it as it is dependent on the information received from HMRC, and it can take HMRC up to 12 weeks to update their system.

I asked if if my pension amount would be backdated, if it did not receive the information in time from HMRC – and it they said no.

So I am completely waiting on HMRC to get my contribution record updated, and for it to advise the DWP.

At the same time, if HMRC award me the childcare credits, I would like a refund, as through no fault of my own I feel I’m being penalised through poor service at HMRC.

I have spent in excess of 15 hours on the phone/writing and I’m no further forward.

I would like you, Mr Harra, to tackle this issue, as per the HMRC Charter: Getting things right; making things easy; being responsive; treating you fairly and being aware of your personal situation, as at the moment I feel totally let down.

SCROLL DOWN TO FIND OUT HOW TO ASK STEVE YOUR PENSION QUESTION

Steve Webb replies: I’m afraid that you seem to have hit not one, but two ‘bottlenecks’ at HMRC and I can entirely understand your frustration.

Let’s consider first the ‘specified adult childcare credits’ – often known as ‘grandparents credits’ – which you have claimed.

As you know, this is a system which provides help when a family member (such as a grandparent) is looking after a child while the child’s parent goes out to work.

Because the parent is working and paying their own National Insurance, that parent does not need the NI credit which comes from receiving child benefit for a child under 12. This can therefore be transferred to you.

The way the process works is that before HMRC will transfer the NI credit to you, it needs to be sure that the child’s parent does not need it.

This means that claims for this credit can normally only be made in the Autumn after the end of the financial year in question (when NI records have been finalised). So, claims for 2021/22 will only be considered from Autumn 2022 onwards.

As you can imagine, opening up the system in the Autumn creates a big rush of applications all at once. It sounds as though HMRC simply cannot cope with the volume, and this is something we have heard from other readers.

Indeed, I am starting to wonder if they will have processed all the claims from Autumn 2022 before the new batch are submitted in Autumn 2023.

Assuming they process claims in date order, your claim (made in January 2023) is unfortunately likely to be well down the queue.

It should be processed eventually, and as it was made before you retired, I can see no reason why DWP should not backdate any resultant pension increase, once the information has been logged on your NI record.

You should not lose out financially because of HMRC’s delay in processing your application.

Did you miss out on a state pension lump sum if you were widowed?

 

This is Money’s columnist Steve Webb calls on elderly widows who might have missed out on a backpayment when their husbands died to get in contact. 

He wants to help people get money that is rightfully theirs, and find out if there is a systematic problem not picked up in the Government’s massive correction exercise for elderly women who were underpaid. 

Find out if you could be affected, and how to contact Steve here.

> Did you miss out on state pension if you were widowed in retirement? 

In the meantime, however, you have spent a large amount of money paying for voluntary NI contributions. I assume from your question that some or all of the years for which you have paid voluntary contributions are also the same as those for which you have applied for credits.

Unfortunately, there are big delays between paying voluntary NI and seeing those contributions registered on NI records.

Again, there seem to be a backlog because so many people have rushed to get their voluntary contributions in before the deadline (which was 5 April 2023 and has just been extended to 5 April 2025). There is no guarantee that these payments will show on your record when DWP calculates your initial state pension.

Again, however, in my opinion there should be no question of DWP not backdating your pension to the full rate with effect from your state pension age, given that you paid the NI contributions in good time.

If it turns out that your ‘grandparents credits’ application is successful then you should claim back the voluntary NI you have paid for those years. Do let me know if you have any problems with this.

It seems clear to me that ‘the system’ simply cannot cope when the public engages in large numbers. 

Publicity around ‘grandparents credits’ has led to higher volumes of claims and now backlogs, whilst publicity around voluntary NI has led to a whole different set of backlogs.

Although the routine business of answering calls and emails, and processing applications and payments is not glamorous, it is essential to the proper functioning of Government, and it deserves much greater focus from Ministers across Government than it currently receives.

What does the Government say? 

HMRC was unable to investigate and respond to the specific case above without our reader’s details and their permission. 

The Government has just extended the deadline to buy extra state pension top-ups to fill gaps in state pension records stretching back to 2006. 

Following a surge in demand it has allocated extra staff to help answer phone calls and deal with correspondence relating to voluntary contributions, and it apologises to any customers facing delays.

Applications for Specified Adult Childcare credits should not be made before the October of the year following the end of the tax year the person wants to claim for.

These credits can only be claimed if the person claiming child benefit does not require the NI credits which they would usually receive.

If someone is awarded SAC credits, any Class 3 voluntary contributions paid for state pension top-ups and no longer needed can be refunded to them.

The DWP is responsible for calculating the state pension. Once payments are processed or credits applied, National Insurance records are updated within days not weeks.