“I spent £ 5,000 to top up my state pension and it was a huge mistake”

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Shirley Nellthorpe of Hampshire paid HMRC £ 5,116 as she neared her 66th birthday in January 2021 to ensure she received full state pension. However, it was only nine months after making the final payment last October that he was told it would have no impact on his state pension. She was also told that there was no guarantee that she would get her money back.

“I paid the additional dues under the direction of HMRC, and no one at any point said it would not count in the calculation. I find it really difficult. You only need 35 years of qualification and I have 50 years under my belt, ”she said.

Ms Nellthorpe was told she would receive £ 170 per week instead of £ 179.60 and wanted to make sure she received the full amount. She calculated that a loss of £ 9 per week could amount to £ 10,000 over a 20-year pension. She said: “I was told in March that my state pension would be updated, but it was delayed due to an error. I played ping-pong by phone for several months, pushed between the Ministry of Work and Pensions and the HMRC, ”she added.

The retiree said she was given a series of incorrect reasons, including that she was not at her workplace when the contributions were made, which canceled them. In August, she received a complex 12-page letter with eight tables and pages of mathematical calculations explaining exactly how her state pension was calculated.

Kate Smith of Aegon, the retreat group, said: “This letter clearly shows the complexity in horrific detail. You would need a degree in state pensions to make sense of all the moving parts. “

Ms Nellthorpe was told that her payments would not increase her state pension because she was ‘contracted out’ which meant she was paying less NI for a number of years under the system. ‘before 2016. When asking for a refund for the £ 5,000, the 66-year-old said:’ I asked for my money and someone at DWP said to ‘try’ HMRC to see s ‘he would give it to me. “

A government spokesperson said he would contact Ms Nellthorpe to arrange a refund.

Sir Steve Webb, former pensions minister and now partner in the LCP consultancy firm, said when people make contributions that turn out to be wasted, they should not be penalized and should be refunded.

Last week, the National Audit Office said the state’s widespread pension errors that led to 134,000 women underpaid were “inevitable” due to the complexity of the system.

An investigation into the failures concluded that the computer systems were outdated and largely manual, and that the administration of complaints required a high degree of understanding on the part of the social workers, which resulted in errors.

It costs £ 15.40 to buy a week of voluntary contributions to NI, or around £ 880 for an entire year. It is estimated that £ 5.13 per week is added to the state pension for each additional qualifying year on the NI record after 2016, adding £ 267 per year.

Jon Greer of Quilter said the extra contributions can be worth way more than they cost, especially for those who live long.

He said: “The government should organize an education campaign to ensure that more people are aware that these refills are available.”

A government spokesperson advised speaking to the DWP before making voluntary contributions to NI through the HMRC.


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