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Women Get a Pension Boost 


By Jennifer Hill, The Sunday Times


October 26, 2008


United Kingdom


Hundreds of thousands more women will win the right to receive a full state pension under a proposal announced by the government on Friday. 

Many women, such as those who gave up work to raise children, miss out on the full pension, now at £90.70 a week, because they have not paid enough National Insurance (NI) contributions. 

Only about a third of women at retirement age are eligible for the whole amount because they have not contributed to NI for the minimum 39 years. 

Work and pensions secretary James Purnell said an amendment would be proposed to the new pensions bill to allow women to buy more missing years of NI contributions. 

At present, people can buy back six years, but the proposals would allow women to purchase a further six years. 

The bill will also change the NI requirements so that both men and women would only need 30 years of contributions to receive the full amount from April 2010. 

The change will apply to women who reach retirement age between April 6 this year and April 5, 2015, and who have amassed 20 years or more of NI contributions. 

“By 2010, around 75% of women reaching state-pension age will be entitled to a full basic state pension, rising to 95% by 2025,” Purnell said. 

“However, we are mindful of the potential disadvantages faced by those who do not have a full work history. 

“This is fair, affordable and straightforward — and it will give more people the chance of a more secure future .” 

Ros Altmann, of the Pensions Action Group, said the move would allow women to buy years’ worth of NI contributions for less than the value of the likely benefits. It costs around £400 to buy a year’s missing contributions. For that, women stand to get £160 a year for life. 

“The idea is the cost of buying years’ worth of extra pension is much less than the value of the extra pension you will get from a normal period of retirement,” said Altman. 

However, the National Pensioners Convention branded it “window dressing” and called for the basic state pension to be increased to the “offical poverty level” of £151 a week. 

Vice-president Dot Gibson said: “Women’s pensions are a national disgrace and no amount of window dressing will mask the fact that the basic state pension must be raised for all pensioners to help them avoid poverty in retirement. 

“Up to a million older women may not even be alive by 2010 when the government intends to make the change and an extra year’s pension will only provide £2.35 a week more on the state pension.” 

Only 35% of women receive the full basic state pension and they also have less private pension provision. 

Just 46% of women who could and should be saving for retirement are putting enough aside, compared with 55% of men, Scottish Widows said.

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