Revenue stayed silent on pensions gap

The Inland Revenue has admitted it took a specific decision not to alert millions of workers to a shortfall in their pension payments.

It dismissed earlier reports that a computer glitch had led to relevant taxpayers not being told they needed to top up National Insurance contributions or face a reduced pension on retirement.

Instead, a spokesman confirmed the annual deficiency notification system was suspended in 1998 because Inland Revenue staff were needed to concentrate on current pension and benefit claims.

The move has left up to 13 million people now facing top-up contributions ranging from £200 to £1,630 if they want to receive the full £77.45 a week state pension on retirement.

The news has infuriated Britain's largest pensioner group, which has now called on the Government to simplify the pension payments system.

Rodney Bickerstaffe, president of National Pensioners Convention (NPC), said it was the latest in a series of incidents that cast serious doubt over the entire system.

"Hopefully, this time the Government will realise that the payments system must be simplified," he said.

"It is very worrying that the Inland Revenue has taken a decision not to inform about entitlement or lack of entitlement to the basic state pension, storing up the possibility of hardship in retirement."

Prior to 1998, deficiency notices were sent out annually to anyone who had gaps in their National Insurance payments, explaining what top-up they should pay for that particular year to be a qualifying year for pension on retirement and receive the full £77.45 a week

The Inland Revenue spokesman said the notification system was not a statutory requirement but a service offered to the public.

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