April 2007

Check your State Retirement Pension Entitlement

A recent case has once again illustrated the difficulties for people who don’t check their own state pension entitlement and later find out that there are ‘holes’ in their record.

The case in question was Rose v R&C Commissioners and concerned the taxpayer who reached state pensionable age on 25 September 2000. A few months before he was 65, the taxpayer was sent a pre-retirement estimate of his pension by the DWP and objected when he was told that he would not receive a full state retirement pension. He was referred to HMRC.

In broad terms, a male pensioner is entitled to a full basic pension if he has paid or been credited with the requisite number of NICs for 44 of the 49 years, starting with the contribution year in which he became 16 and ending with the contribution year ending before the year in which he became 65.

The taxpayer was had spent some time in the forces and also was in full time education for several years after he was 16 and before he started full time work. However, the contribution records showed that he received credits for only part of the period of education and that he had paid no voluntary contributions at the time or since. When this became clear, the taxpayer offered to make good the deficiency but HMRC refused to accept any additional contributions as he was out of time.

The Special Commissioner found that, after a detailed examination of the facts, documents and HMRC’s evidence, that the taxpayer’s contribution record was a reliable record. The taxpayer’s contention that the record was incomplete or inaccurate was dismissed.

Based on the evidence, the Special Commissioner was satisfied that HMRC had sent the taxpayer notice of the non-payment and details of the position of someone who did not pay.

HMRC did not dispute that the taxpayer failed to pay as a result of his ‘ignorance or error’. However, based on the evidence, the taxpayer was aware at the time of his choices, or would have been aware of them if he had read the leaflets he was sent and made enquiries. He chose at that time not to enquire or not to pay and so chose not to exercise due care and diligence in protecting his contribution record. The taxpayer’s appeal was dismissed.

This case illustrates the problem faced by many in that we put these things to one side to deal with at a later date. Don’t miss out on your pension entitlement.

State pension entitlement can easily be checked by asking for a pension forecast.

Internet link:

The Pension Service website