UK state pension cancels direct debit (why?) and sends bill

[RetireJapan]

Noticed HMRC stopped taking my money (again) a few months ago. No idea why. The account has plenty of money in it, I haven't interacted with them, etc.

Then last night I got a brown envelope with this slip in it asking for payment for the last eleven months or so...



I guess they are just going to send me bills from now on? That works for me, as long as I get my pension credits

[RetireJapan]

Sending the payment from NatWest was really easy, and it had a specific reference number so hopefully they won't lose it this time (or sit on it until I call them to tell them what it is).

I guess I will keep an eye on my online pension account and call them if I don't see the payments show up by say the end of January.

[taneandy]

It's annoying isn't it!
The last time I called up HMRC I was told that the direct debit may be canceled if there is any unassigned money sitting in your NI account, so it's probably a good idea to call up soon after making any back payments.
Doesn't sound like that is the case for you though.

[RetireJapan]

It's annoying isn't it!
The last time I called up HMRC I was told that the direct debit may be canceled if there is any unassigned money sitting in your NI account, so it's probably a good idea to call up soon after making any back payments.
Doesn't sound like that is the case for you though.

Yeah, that's what happened last time, which is why I didn't bother trying to backpay the missing months from the last time they stopped the direct debit

I think I will take care of that now though, as it is just leaving money on the table (the UK uses full calendar years of contributions, unlike Japan which goes off months, so having a year with some months paid and others unpaid doesn't count at all).

[JimmyK]

Not sure if this helps (or if you’ve already determined this yourself), but here’s something to throw into the mix. It’s a bit of a long message, so bear with me. Like many UK expats, I’m rushing to make as many back payments as I can for gap years before the April 5th deadline. I’ve also set up a direct debit for deduction of pension contributions going forward from now until retirement. Having made 4yrs of back payments (so far), it turns out that only 1 of these years (2006) had the money correctly allocated to it. They have record of the other 3yrs (So, do I. Through my bank statements!), but instead of allocating the money for more past years (as I’d been assured they had done) they’ve instead used it as a fund for paying forward payments! This has resulted in no further direct debit payments being deducted (so at least I’m not being double charged), but it’s now thrown everything out of whack. The reason being (and his is coming straight from the HMRC horse’s mouth) that their system can’t distinguish between money received from back payments and money received via direct debit for future payments. The solutions suggested to me were, a) Pay all back years in one lump sum and resume direct debit for forward payments, or b) cancel direct debit and just use the back payment system. I’ve opted for option b for now, which effectively means that instead of, for example, using direct debit to pay for the current tax year, I’ll wait for that year to expire then pay it as a back payment. The deadline of April 5th 2023 applies to back payments up as far as 2017 (I think), so it will still be possible to make back payments after this. So this option b ought to work. The point is that HMRC’s system doesn’t cope with ad hoc back payments + direct debit for future payments, so if you’re in a situation like mine you’ll be constantly running into this issue..unless you consider these options.

[beanhead]

The point is that HMRC’s system doesn’t cope with ad hoc back payments + direct debit for future payments, so if you’re in a situation like mine you’ll be constantly running into this issue..unless you consider these options.

This supports the idea that avoiding the direct debits is probably sensible.
Putting money in a UK bank or Wise once a year and then making that payment is fairly simple, in my experience (NatWest still lets me keep an account at the moment.)

[Gareth]

This supports the idea that avoiding the direct debits is probably sensible.

If you pay all of your back payments before setting up your direct debit, there’s no reason to avoid direct debits. Never had a problem with direct debits. They take the payment twice a year and my online record is updated around the same day when the second payment goes out.

The only reason to be be careful with direct debits is if you haven’t managed to pay all your back payments yet.

[Wales4rugbyWC23]

I really do think 'Dealing with HMRC' needs its own section on the Board Index of Retire Japan . I don't see any other English speaking country's people complain as much about their rax authorities as much as Brits and their beloved HMRC. The Japanese tax office seem positively saintly compared to the HMRC.

Just to chip in about my experiences on attempting to set up a direct debit for class 3 National insurance contributions. On my second attempt, I had tried about five years ago, and it came to nothing. Tried again last year, I got a reply two weeks ago. They can't accept it, please fill in a direct debit form, but had been just want I had sent them.... Anyway, I have resigned myself to until I have paid my full 35 years of NICs to pay by cheque, acceptable to HMRC and grandparents.... and to which I have had no problems over the last twenty years with.

[RetireJapan]

If you pay all of your back payments before setting up your direct debit, there’s no reason to avoid direct debits. Never had a problem with direct debits. They take the payment twice a year and my online record is updated around the same day when the second payment goes out.

The only reason to be be careful with direct debits is if you haven’t managed to pay all your back payments yet.

My direct debits stopped the first time because I sent them a back payment. Then they stopped again a second time for... no reason?

Fool me twice, I feel dumb. Not doing direct debits anymore!

I will send them a bank transfer once a year going forward I think. Seems to be the most foolproof option

[Gareth]

Seems I’m the only supporter of direct debits haha!

I wonder whether having my case dealt with by a complaints manager when I was initially refused helped it to be set up correctly?

Either way, I hope those who are thinking about paying aren’t put off by direct debit and payment issues. Even if it’s a bit more effort, it’s definitely still worth that effort to get it paid. Good luck everyone!