Eamon Campbell: ‘Everyone is in denial there is a problem’
Savers with holes in their state pension records are being stonewalled by staff in three separate Government departments, who have all refused to help them.
After we revealed a mystery ‘glitch’ in the state pension system, many readers got in touch to say their valuable National Insurance credits were missing – contradicting the Government which had told us there was no indication of a wider issue.
Eamon Campbell, pictured right, turned 66 in February and is two years short of getting a full state pension due to missing credits.
A 20-month period when he claimed universal credit during the pandemic was not updated, and he has been unable to buy top-ups to fill in the few remaining gaps in those years.
Lost NI credits can mean pensioners face shortfalls in retirement unless they notice and get them fixed.
The Department for Work and Pensions and HMRC failed to explain the cause of the problem in Mr Campbell’s case or the others flagged by us.
A Government spokesperson said: ‘The vast majority of National Insurance credits relating to benefit claims are added to a person’s account automatically.
‘We also conduct a comprehensive review of a person’s National Insurance record before they reach retirement age to ensure these credits are present and therefore reflected in any state pension award.’
Former Pensions Minister Steve Webb is demanding the Government ‘come clean’ on what is going wrong and when it will be fixed.
‘Anyone who tries to get to the bottom of this gets driven from pillar to post and struggles to get a straight answer,’ he says.
As with the last time we covered this issue, we asked the DWP and HMRC whether there has been a ‘glitch’ in the NI credits system, and if so what is the cause, how many people are affected and when they expect records to be fixed?
Aside from stating the ‘vast majority’ of credits relating to benefits are added automatically, they offered no explanation for why this did not happen in the cases we raised.
We also asked which Government department individuals should contact in order to get this issue sorted, given people’s stories of being given the runaround by numerous staff, but received no response.
DWP under fire in succession of scandals
‘Everyone is in denial there is a problem’
This is Money readers told us they constantly hit dead-ends when seeking help from universal credit and pensions staff at the DWP, and the NI helpline at HMRC.
According to their feedback, Government staff gave a mishmash of reasons why their NI records are not being updated – they were told this will only be done at the end of a universal credit claim, or when someone is close to state pension age, or when a new system is built and in place.
Mr Campbell, a retired management accountant and debt adviser who reached state pension age 10 months ago, says he phoned many times but was passed from department to department with no positive conclusion.
‘Most responses were along the lines of “I don’t know” and “speak to this department”. I don’t know who to speak to now.’
The Norfolk pensioner, who claimed universal credit because he was unable to work face to face with people during Covid lockdowns, adds: ‘I could see this coming. I spoke to my work coach and said the NI credits still haven’t been made up for these years. He didn’t know the answer.
‘It’s reminiscent of the Post Office scandal. Everyone is in denial there is a problem. They know very well there is a problem but don’t want to sort it out.’
After we flagged his case to the Government, it told us Mr Campbell’s credits had been updated.
‘I can’t get any sense out of anyone’
Carl Hughes, a former council worker from Gwynedd in Wales, says he has a year when he claimed universal credit missing from his NI record.
A copy seen by This is Money states he can make up a shortfall in 2021-2022 by voluntarily paying £800, and warns this may increase after April 2024 – even though buying a top-up would be a waste of money for someone with an NI credit for that year.
The 60-year-old told us: ‘I have been trying to find out if you get National Insurance credits when you claim universal credits and I can’t get an answer from the Future Pension Centre or from universal credit people.
‘I can’t get any sense out of anyone. I phoned the universal credit people. The woman there said “I haven’t been asked that question before and I don’t know”.’
Since we raised Mr Hughes’s case, the Government told us his credits have been awarded.
It notes that HMRC advises people to wait until credits are showing on their record before making any voluntary payments needed to make that a qualifying year, and told us if any payments are made in error they will be refunded.
‘This is a much wider issue!’
Another This is Money reader, a 64-year-old senior hospitality manager from Essex who prefers not to be named, started claiming universal credit at the start of the pandemic.
He told us in response to our last story ‘This is a much wider issue!’ and says a part year in 2019-20 and full years in 2020-21 and 2021-22 are omitted from his NI record
When he raised this with universal credit staff the response he got last June, seen by This is Money, reads: ‘I have been asked to assure you that you will receive all of your NI entitlement for any periods missed.
Is universal credit missing from your NI record?
You can check your National Insurance record here.
The current year of 2022/23 will not be updated yet.
The Government tells us the vast majority of universal credits claimants’ NI records are updated at the end of each tax year.
However, in the past people eligible for credits – including carers and people receiving child benefit – have usually seen these updated in the October after a financial year has ended.
If you think you have NI credits missing, the Government’s contact details are here.
If you have not received credits for a period when you claimed universal credit, write to tell us your story at firstname.lastname@example.org.
Please put UNIVERSAL CREDIT in the subject line.
If you are struggling to get NI credits updated, you can also contact your MP and ask them for help.
‘There is a system being built for this purpose and for any periods missed will be added to your NI records when the system is established. Regards.’
He wants to buy voluntary top-ups to fill in gaps spread over 12 years ahead of the deadline next spring for purchases stretching back to 2006, but he needs the missing years when he claimed universal credit to be added to his record.
After we sent his details to the Government, his NI credits were updated.
He told us: ‘I’m so grateful that my NI record has now been corrected. If it hadn’t been for this intervention by This is Money I doubt very much it would have been amended before my retirement date. Thank you so much!’
‘I’m extremely anxious about this’
A retired bookkeeper from Glasgow contacted us because credits for a part year in 2020-21 and the full year of 2021-22 are omitted from her NI record.
The 65-year-old, who does not wish to be named, says she was told by the DWP’s pensions staff they had no record of her receiving universal credit, then sent back and forth between those two departments for a couple of months without getting anywhere.
‘I was sent from one person to another and was told they don’t pay NI for UC claimants. I still didn’t give up. I tried someone else. I even referred them to the Government website which clearly says the contributions for UC recipients would be made automatically.
‘After consulting with her manager, one person actually agreed with me. I later received a notice in my UC journal that they couldn’t investigate my problem until I was within four months of the date I was to receive my state pension.
‘Obviously, I’m extremely anxious about this as I have no other form of income. As it is, my state pension will be quite a bit less that the full state pension since I do not have enough contributions. I had been making Class 3 contributions for a while but I can no longer afford it.
‘I don’t feel very secure about this. I am not going to get a full state pension. Every extra year is important to me.’
After we raised her case with the Government, it told us her NI credits were now up to date.
‘It’s as if no one cares’
A retired NHS manager spent three hours one Monday morning phoning HMRC and the universal and future pensions departments at the DWP.
She describes her experiences as follows: ‘State pensions say it’s not their job, they just calculate the state pension. NI staff, they say they don’t do anything, get whatever is forwarded on to them.
‘Universal credit, the staff member told me she will speak with her manager and after a week if I haven’t been contacted to come back again.’
The 57-year-old from Hertfordshire says an eight-month period in 2021 when she claimed universal credit is missing from her NI record.
‘It’s as if no one cares,’ she says.
Since we flagged her case to the Government, it told us credits have now been applied for the period she was receiving universal credit.
‘DWP need to come clean,’ says Steve Webb
‘It is not good enough for the Government to say that this will all be sorted out eventually,’ says Steve Webb, This is Money’s pensions columnist and a partner at pension consultant LCP.
‘Some people have already retired on a reduced pension because of these problems, whilst others may have wasted money paying voluntary National Insurance unnecessarily.
‘DWP need to come clean on what is going wrong and when it will be fixed. It also needs to make sure that frontline staff are trained so that people who ask questions can get well informed answers.’
Webb says National Insurance credits are a vital way of making sure people build up a full state pension even when they are out of paid work.
‘People on universal credit were told that they would be protected but it is clear that this system is not working properly.’
Labour’s Shadow Pensions Minister, Matt Rodda MP, says: ‘Pensioners who have worked hard and saved all their lives are being badly let down by the Government, who are failing to solve the latest in a series of problems with pension payments.
‘Pensioners deserve to be treated so much better than this.
‘The Conservatives have already threatened pensions by recklessly mismanaging the economy and Ministers must get a grip to make sure everyone is getting the pension they’re entitled to.’
Some people have already retired on a reduced pension because of these problems, whilst others may have wasted money paying voluntary National Insurance unnecessarily
Steve Webb, former Pensions Minister
Wendy Chamberlain MP, Liberal Democrat Spokesperson for Work and Pensions, says: ‘We were told that moving to universal credit would make things easier, but time and time again we see systems which aren’t fit for purpose being operated by staff without training or guidance.
‘Leaving pensioners without the pensions they are entitled to is not just wrong, but is a health and social care disaster waiting to happen.
‘The Government must acknowledge this problem immediately and sort out their broken systems. Anything else fails pensioners and demonstrates they aren’t capable of even getting the basics right.’
Staff on helplines ‘not adequately trained’
‘The DWP systems do seem to be in a bit of disarray,’ says former Pensions Minster Ros Altmann.
‘I believe that the problem stems from the old computers being used, the lack of coordination between HM Treasury and DWP systems and staff on the “helplines” who are not adequately trained to pick up all the problems that present themselves.
‘Of course, with any computer systems that serve millions of people, there are bound to be errors. The problem, however, seems to be that the DWP seem to always assume that these are one-off aberrations, but the reality is that there could be thousands of people affected and they just don’t seem to know.’
Lady Altmann says NI credits for the state pension can be really important, especially for older women who need to know whether they have sufficient years for a full pension, and if not whether they can work longer, register their caring responsibilities or pay additional voluntary contributions.
She adds: ‘I think it is also worrying that these problems only seem to get sorted when the media become involved and there is clearly a team of experts who can go through these one on one cases to sort out the problems, but they are not providing systemic fixes.
‘The state pension records seem not to be reliable and part of the issue may be that when people are young, the officials have not been too worried about getting things “right” and errors have compounded over time, without adequate cross-checking between NISPI [National Insurance Services to Pensions Industry] and DWP, as NISPI is run by Treasury but DWP has its own records that take a feed of NI information.’
How much is the state pension?
The basic state pension is currently £141.85 a week, or around £7,400 a year. It is topped up by additional state pension entitlements – S2P and Serps – accrued during working years.
The two-tier state system was replaced in 2016 by a new ‘flat rate’ state pension. This is currently worth £185.15 a week or around £9,600 a year.
Both amounts will rise by 10.1 per cent next April.
People who have contracted out of S2P and Serps over the years and retire after April 2016 get less than the full new state pension.
But they can fill gaps in unpaid and or underpaid National Insurance in previous years, make voluntary top-ups to buy extra qualifying years, and build up more years if they have enough time between now and state pension age.
Workers needed to have 30 years of qualifying National Insurance contributions to get the old state pension, but they now need to have 35 years of contributions to get the new flat rate state pension.
But even if you paid in full for a whole 35 years, if you contracted out for some years on top of that it might still reduce what you get.
Everyone gets the option of deferring their state pension to get more in their later years. You can check your NI record here.