Pension top up problems

TrevorJ

Latest news. I quickly got through to someone who told me that my letter (sent 12 July) was being "looked into" and I was given the direct number of that person. I phoned them and was told that they will now "chase it up". I will see what happens next.

pafpcg

Apologies to TrevorJ for posting an originally incorrect e-mail address in post#3. But you were certainly quick off the mark - you must have sent your failed email in the time between me posting the mistyped address and me spotting the error and correcting it, all inside eight minutes!

I wonder what the HMRC excuse will be for the non-crediting of your funds and then failing to acknowledge your query.

There is, of course, no reason why we can't defer basic State Pension AND the Class3A Top-Up pension getting 10.4% extra per year of deferment - the benefit of deferment doesn't preclude buying Class3A top-up or vice versa.

pafpcg

Well, that was quick!

I've had a response to my email query to the mailbox given above for the DWP SP Top-Up team:

Dear XXXXXX

So that HMRC can answer your query, could you please provide your National
Insurance number by return email

regards

XXXXXXXX | Team Leader, Additional Voluntary Contributions and State
Pension Top Up Team | Department for Work and Pensions | Newcastle

So it does appear that we can use that mailbox to get DWP/HMRC to chase possibly missing funds.

EdGasket

£21,000 equates to around £20 per week for £20 years ignoring any investment gains it might make. How much extra state pension did that amount buy?

xylophone

£21,000 equates to around £20 per week for £20 years ignoring any investment gains it might make. How much extra state pension did that amount buy?

https://www.gov.uk/state-pension-topup

TrevorJ

It is not a simple choice, but my thinking: The £21,000+ top up gives an extra £25 per week. As you say £20,000, over 20 years would give £20 per week plus any investment increase. But the pension is index linked. At the same rate as the last 20 years - about 2% - that means the £25 will increase to about £37. You'd have to cover that increase somehow with the investment.

If I live longer than 20 years the pension will keep going and keep increasing, whereas drawing down the capital, it will end. As far as I can see the only advantage of drawing down the capital is if I die sooner I would have some of the capital left. Not much use to me then!

TrevorJ

Thanks for the info about the DWP email contact. I hope that HMRC will sort it out, as they seem to be on the case. But if not I will try this contact.

It is disappointing that DWP did not mention this possibility when I phoned them. I asked them if they could do anything about the problem and was told that was up to HMRC to contact DWP and since they hadn't, there was nothing DWP could do about it and I should contact HMRC.

EdGasket

Your assumptions also assume that the Gov't doesn't change the rules or run out of money; both are possible.

TrevorJ

"Your assumptions also assume that the Gov't doesn't change the rules or run out of money; both are possible."

That is true. And it is also possible that the next time there is a crunch the government will do a 'Cyprus' and take the money out of your bank account. So you could buy gold instead and as the US did in 1933 the government could take that too!

pafpcg

"Your assumptions also assume that the Gov't doesn't change the rules or run out of money; both are possible."

Do governments ever run out of money? I thought they usually just printed some more! In which case, having an "investment" that keeps pace with inflation is invaluable.

If my partner lasts as long as her mother, she's got another 30+ years left and she'll inherit 50% of my top-up pension when I shuffle off. You did know that spouses inherit half? So it's not just an individual life expectancy to be considered but also the longest lived of a couple.

Anyway, we keep being exhorted to diversify and re-balance our portfolios. For those with large (six & seven figure) retirement portfolios and who reached State Pension retirement age before April 2016, a twenty or forty thousand pound investment in about as secure an income stream as is possible seems to me to be a good idea. Of course, for those who wish to maximise an inheritance may have other priorities.