- State pension top-ups have been plagued by huge delays and non-payments
- Now the Government allows pension savers to top up online and through an app
- But pensions expert Steve Webb warns the new system could still face delays.
Pension savers can now top up their state pensions without picking up the phone, after the Government finally launched a long-promised online service following a This is Money campaign.
The online portal will allow people to check whether buying top-ups will increase their state pension and make payments.
The scandal of missing state pension top-up payments was revealed by This is Money last year, with some savers reporting that large payments they had made had disappeared for up to a year.
Others reported long delays as huge demand for state pension top-ups appeared to have overwhelmed the service, run jointly by DWP and HMRC.
Payment delays: The state pension supplement system has caused headaches for Britons trying to boost their retirement benefits through voluntary National Insurance contributions.
Topping up your state pension involves purchasing more National Insurance (NI) credits, which has been a difficult process in the past.
Anyone trying to buy more NI had to make two phone calls, often with long wait times.
They first had to call the DWP Future Pensions Center to find out which years they could top up, the cost and what it meant for their pension.
They then had to call HMRC, get an 18-digit number and wait for DWP to process the payments and update their state pension or state pension forecast.
Now HMRC and DWP have launched a fully online system to help Brits make voluntary contributions to NI.
This can be done at the initiative of the Government. Check your state pension website or via the HMRC app.
Steve Webb, partner at LCP and former Pensions Minister, said: “It is very good news that people can top up their NI record online.”
‘So far people have had to struggle with two different phone lines: one to check with DWP which years they can top up and then another with HMRC to get a reference number to make a payment.
“It should be a step in the right direction to be able to do all this without being on the phone.”
But Webb warned there was still the threat of delays to state pension top-ups unless the DWP improved the way it handles its part of the process.
Webb said: ‘The simple fact that HMRC updates its NI record is only half the story.
‘Then it is necessary for the DWP to reassess your state pension entitlement based on your best contribution record.
‘There are already too many cases where people wait months or longer for their pension figure to be reviewed.
“It is vital that the Government puts new capacity in the DWP to process all of these changes, otherwise they will simply have created a new bottleneck in the system.”
Pensions Minister Paul Maynard said: “The state pension is the foundation of income in retirement, so we have introduced this new online tool to help make it simpler to increase for those who can do so.”
“I encourage everyone to check their state pension provision and see how they could improve their state pension award with just a few clicks.”
