HMRC to act over state pension ‘missing years’

HM Revenue & Customs has vowed to overhaul how it deals with taxpayers investigating unexplained gaps in their state pension records following one woman’s 10-month battle to correct hers. 

Lyndsey Jones, a 55-year-old FT journalist, noticed a missing year in her national insurance record when she checked her state pension forecast a year ago as part of her long-term retirement planning. 

Until then, she had believed she was on track to receive a full state pension — currently £8,700 per year — when she reached state pension age. However, the gap left her one year short of the 35 years of qualifying contributions needed to get the full amount. 

Ms Jones disputed the gap, which dated back to 1988-89, when she was employed full-time as a reporter on the Egham Informer newspaper in Surrey.

However, the tax authority could not find records for the disputed year, and said Ms Jones would have to provide evidence that the contributions were made on her behalf by producing payslips, P60s or bank statements from 30 years ago.

FT Money first reported on the case last July. After Ms Jones lodged a formal complaint in October, HMRC contacted her to say it had traced the missing NI contributions and would be reviewing its training and working practices as a result. 

“I am over the moon that this has been resolved, but I’m even happier that others in my situation should now find that their queries about missing years are resolved far more quickly,” she said. 

HMRC told Ms Jones that the problem arose because the missing records had been kept on microfilm (scaled down reproductions of documents) which had not been uncovered in previous searches. She was told that HMRC was reviewing the guidance it gave to staff to make sure similar cases could be traced much more rapidly. 

HMRC apologised “profusely” for the long delay in resolving the case and has offered to pay £150 compensation. 

The tax authority said: “We are glad that we have been able to help Ms Jones achieve the right outcome. While most customers’ national insurance records will be correct, this demonstrates the value of the government service Check Your State Pension that enables customers to check their individual records and resolve any inaccuracies.

“It was only as further information came to light, as a result of our continued engagement with Ms Jones, that we were able to identify the specific errors in the employer’s payroll returns which had prevented Ms Jones’ contributions being allocated to her national insurance record.

“Tracing missing records can be complex and span decades; there may also be errors made by employers that can delay our usual processes. This means the time to trace records can vary.

“We continuously strive to improve the support we can offer our customers and welcome the opportunity to receive any feedback to enable us to inform this process.”

Sir Steve Webb, director of policy with Royal London and a former pensions minister, said the case was “shocking” and should trigger a wider review.

“It is shocking that members of the public have to do battle with HMRC to get what is rightfully theirs,” said Sir Steve.

“It is hard to believe that this is an isolated case. HMRC should be proactively reviewing cases where they have been alerted to potential problems with NI records as well as understanding more systematically how these errors have arisen in the first place.”