Monday 24 October 2016

Why married women are getting less than 30p a week pension


Women particularly in their 60s and 70s are stuck on low pensions worth a tiny fraction of the full new state pension amount because they paid a lowered amount of National Insurance while in work.

The "married women's stamp" was offered to working women until 1977. Thousands of women agreed to it: many, if not most, without realising the enormous effect it would have on their state pension entitlement when they retired.

Lynda Moore, 71, was offered the lower rate when she got married in the early 1960s.

The retired nurse says she did not make the connection with her state pension, believing that the reduced rate, also known as the "small stamp", was "something to do with the NHS".

Now her pension is worth just 30p a week, despite the fact that she worked for almost 50 years.

She paid a lower rate of National Insurance, which is why her pension is smaller - but many of the women in her position argue that they were not warned of the pension implications when encouraged to pay the lower rate.

Ms Moore said: "Our wages then were a pittance, and we thought that if we can reduce the amount of NI we pay, we will."

The current, new system, requires at least 10 years of NI contributions before a state pension entitlement starts to be built.

But under the old system some people, like Ms Moore, could have full records - but only qualify for pitiful payouts because of their decision.

The lower contributions were available until the more progressive 1970s, by which time it was realised many women might lose out.

In 1977 - the year which saw the release of Saturday Night Fever - the lower-rate option was no longer available.

But anyone who chose the women's stamp before this could continue.

This means that the youngest women affected, who married at the start of 1977 at the age of 18, could be approaching 60 today, still paying the lower rate and yet to reach retirement age.

What does it mean?

Some married women opted to pay a reduced rate of national insurance. It was worth 5.85pc of their weekly earnings between £155.01 and £827, instead of the normal rate of 12pc.

It dramatically reduced the state pension they were qualified to receive independently of their husbands, as well as removing their right to receive maternity and unemployment benefit.

Instead they would receive 60pc of their husband's state pension allowance when he reached his retirement age.

What can I do?

Check your National Insurance record and state pension entitlement. This is free and can now be easily done online at insurance-record and gov. uk/check-state-pension.

This will tell you if you paid the reduced rate and how much state pension you are entitled to as a result.

If you are still working, you can opt out of the lower rate by filling out a form called CF9. Women currently in their late 50s might have planned to retire around now.

But changes to the state pension age mean that they actually have another nine years until they are eligible for the state pension.

This has been the subject of concerted campaigning by Women Against State Pension Inequality, which argues that the change was poorly communicated and is leaving women out of pocket by thousands of pounds.

Anyone age 60 now will retire in six years' time, so still has time to make voluntary contributions or continue to work in order to add to their state pension allowance.

What if I'm already retired?

For anyone already retired, there may be little they can do about it if they carried on working right up until state pension age.

"Voluntary Class 3" contributions can be made - but only if the person has a gap in their NI contributions within the past six years.

However, depending on your age, there are slightly different rules which may mean you have flexibility.

If you are a woman born between 6 April 1950 and 5 October 1952, you can increase your state pension by making voluntary contributions up to six years after reaching state pension age. These can be for years going back to 1975.

This applies to anyone who reached state pension age between 6 April 2010 and 5 April 2015.

*** Courtesy Telegraph



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