- Supplements to state pensions are plagued by enormous delays and missing payments
- The government is now allowing pension savers to top up online and via an app
- But pensions expert Steve Webb warns the new system could still cause delays
Pension savers can now top up their state pension without picking up the phone, after the government finally launched a long-promised online service following a This is Money campaign.
Through the online portal, people can both check whether purchasing supplementary pensions will increase their state pension and make payments.
The scandal of missing top-ups to state pensions was exposed by This is Money last year, with some savers reporting that huge payments they had made had been missing for a year.
Others reported long delays as huge demand for top-ups to state pensions appeared to have overwhelmed the service, which is jointly run by DWP and HMRC.
Deferment: The system for topping up state pensions has caused headaches for Britons as they try to boost their pension benefits by paying voluntary national insurance contributions
To top up your state pension you will need to buy more National Insurance (NI) credits, which has been a difficult process in the past.
Anyone trying to buy more NI had to call twice, often with long wait times.
First they had to call DWP’s Future Pension Center to ask which years they could top up, what the costs were 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 is possible with the government Check the website of your state pension or via the HMRC app.
Steve Webb, partner at LCP and former Pensions Secretary, said: ‘It’s really good news if people can top up their NI record online.
‘Until now people have had to fight through two different phone lines: one to check with DWP which years they can top up in and one with HMRC to get a reference number with which to make a payment.
“It must be a step in the right direction to be able to do all this without being on the phone.”
But Webb warned there is still a threat of delays in state pension top-ups unless DWP improves the way it handles its side of the process.
Webb said: ‘Simply getting your NI record updated by HMRC is only half the story.
‘Then you will need DWP to reassess your state pension entitlements based on your improved premium data.
‘There are already too many cases of people waiting months or longer for their pension figures to be revised.
‘It is vital that the Government installs new capacity at DWP to deal with all these changes, otherwise they have simply created a new bottleneck in the system.’
Pensions Minister Paul Maynard said: ‘The state pension is the basis of retirement income. That’s why we’ve introduced this new online tool to simplify raising them for those who are able to do so.
‘I would encourage everyone to check their state pension forecast and see how they can improve their state pension with just a few simple mouse clicks.’