Universal credit claimants report mystery ‘glitch’ in state pension records

A mysterious “glitch” in the state pension administration left two savers struggling to close potentially costly gaps in their retirement income.

Missing National Insurance credits can mean retirees face pension shortfalls unless they notice and get them fixed.

Margaret Whitaker, 66, pictured right, has been battling to have two years of credit added to cover a period when she claimed universal credit after her husband’s death.

She says it took dozens of calls to the Department for Work and Pensions and HMRC over several months to get her 2020 to 2022 record corrected.

The retired receptionist from Moray, Scotland, sought help from former Pensions Minister Steve Webb, who explained what to ask for and encouraged her to persevere.

Ms Whitaker says her eventual success allowed her to buy a few weeks of state pension supplements for around £60, instead of paying around £1,650 for two full years.

But she says it was distressing to have to explain her personal history on numerous calls, sometimes after waiting 20 minutes or half an hour.

“I had to repeat the same story every time. It was stressful because it was about the time after my husband passed away. At one point I was told that I was not entitled to credits.’

People who claim universal credit, such as those receiving child support or health care benefits, must have these periods entered in their NI records.

They receive credits that eventually increase their state pension if the qualifying years are not earned in any other way. If these are missing, this can lead to a lower pension upon retirement.

Webb and This is Money are conducting separate research into years in which child support was claimed and which did not end up in the state pension administration.

‘Nine months of declarations were missing from my file’

Separately, retired Graham Pickard found a nine-month period where he claimed universal credit was not on his file in 2020, and unsuccessfully called the government to get it straightened out.

He told us, “Almost two years on my record, I still have zero NI credits. It doesn’t matter which department I speak to, there doesn’t seem to be anyone who can do anything about this.’

Mr Pickard, 65, a retired airport worker from Manchester, was a year short of qualifying for a full state pension of £185.15 a week, or about £9,600 a year.

His NI record was updated after This is Money raised his case with the DWP and HMRC, and he will now be able to pay around £200 to fill a gap last year rather than more than £ 800.

He told This is Money: ‘I’ve been in touch with HMRC and they told me they were aware of it and it was an outage that affected a lot of people and a note was put on my file.’

Mr Pickard adds that he has raised the issue on Twitter, saying: ‘A lot of people have replied that they are in the same situation, so it could be another pension scandal being kept quiet.’

He says, “Thank you for your intervention without which I would still be waiting.”

This is Money has spoken to a third person who is trying to close a gap in their NI record from when they claimed universal honors, but who doesn’t want their story published.

The reason why these universal credit applicants’ records have not been updated and their valuable National Insurance credits have disappeared as a result is unknown.

We’ve asked the DWP and HMRC if there’s been a ‘glitch’ in the system, and if so what caused it, how many people are affected and when they expect the data to be restored.

At the time of publication, we received no response to these questions, although after flagging Mr Pickard’s case, we were told that the Government believes there is no indication of a wider problem.

A DWP spokesperson said: “We have spoken to Mr. Pickard and resolved his case, and we view Ms. Whittaker’s case as a priority.”

Steve Webb, who is now a partner at LCP and a columnist for This is Money’s pensions, says: ‘Everyone with universal credit should automatically receive National Insurance credits to protect their state pension entitlement.

‘Had Mr. Pickard and Mrs. Whitaker not checked, it seems very likely that these funds would never have been credited to their account and that their state pension would have been short as a result.

“They both found it incredibly difficult to find someone who knew how the system worked or how to fix these errors.

“As always, when you see one or two people go wrong, you wonder if this is a symptom of a much bigger problem.

“It is vital that HMRC and DWP join forces to get to the bottom of what went wrong here, and to ensure that large numbers of people with universal credit don’t go astray.”