I am enquiring regarding my state pension. I didn’t qualify for a full pension in my own right as I paid reduced married woman’s contributions all my working life after getting married in 1968.
When I got to the age of 60 my state pension was 11 pence a week, I am presuming related to my contributions before marriage? Once my husband reached pensionable age I received a reduced pension based on his contributions.
I have read recently that women should receive an allowance for staying at home looking after their children? Would I be entitled to this?
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I spent seven plus years at home with the children, then worked part time when my youngest started school, working limited hours so as to be at home when the children were home from school. This was low pay and I didn’t earn enough to pay NI contributions.
In discussion with another mum around my age she stated that she received extra pension to cover the years she stayed at home with her daughter. She didn’t return to work until her daughter was age 18.
I am now almost 71, so maybe this is all too late? As we get older my husband and I are realising that if anything happened to my husband my financial situation would be greatly reduced.
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Steve Webb replies: Since 1978-79 there has been a system whereby parents at home with children can get help with their state pension.
But the rules for what used to be called ‘Home Responsibilities Protection’ were complex and may not have helped in your particular situation.
For women such as yourself who reached pension age before 2010, it used to be necessary to have 39 years of full rate National Insurance contributions to get a full state pension.
Those with fewer years got a scaled down pension – for example, if you had 35 years, you would get 35/39 of a full basic pension.
But if you had less than a quarter of this target then you got no basic state pension in your own right. The few pence a week that you received at retirement were from something called the ‘graduated retirement benefit’ which was a precursor to the state earnings related pension scheme.
The way that Home Responsibilities Protection (HRP) worked was that each full year from 1978-79 onwards that someone was getting child benefit meant one less year of actual contributions was needed for a full pension.
So, if someone was at home with children and getting child benefit in 78/79, 79/80 and 80/81 they would have three years of HRP, and this means they would only need 36 years of contributions for a full pension.
In this example, it would also have meant that you got some pension as long as you had at least nine years in the system (because nine is one quarter of 36).
Your position is slightly different in that women who had opted to pay the reduced ‘married woman’s stamp’ did not qualify for HRP for as long as their decision to pay the reduced stamp was still in force.
The assumption was that they would end up claiming on the basis of their husband’s record in any case, so they did not need a scheme to boost their own contribution record.
What is the ‘married woman’s stamp’?
The government started to phase out the married woman’s stamp after 1977, and once a woman had had more than two years out of paid work post 1977 their ability to pay the married woman’s stamp lapsed.
I would guess therefore that some of the years when you were getting child benefit for your older children *would* count as years of HRP, because your married woman’s stamp probably lapsed in 1979.
The problem for you is that although the HRP reduces your target number of years for a full pension, you still had to make actual full rate contributions for a minimum number of years.
If your work in later life was always so lowly paid that no NI contributions were payable then unfortunately you probably did not build up enough qualifying years to satisfy this minimum requirement. If in doubt, you can always ring the Pension Service to check this.
Finally, in terms of what would happen if you husband were sadly no longer to be around, your own state pension would almost certainly increase to the full basic pension which is paid to widows.
If this was your only income, you might also be able to claim Pension Credit to top up your income and to get help towards costs such as rent and council tax.
How much is the state pension?
The basic state pension is currently £125.95 a week. It is topped up by additional state pension entitlements – S2P and Serps – accrued during working years.
The two-tier state system has changed for people retiring since 6 April 2016, when it was replaced by a new ‘flat rate’ state pension. This is currently worth £164.35 a week.
People who have contracted out of S2P and Serps over the years and retire after April 2016 get less than the full new state pension.
But they can fill gaps in unpaid and or underpaid National Insurance in previous years, and build up more qualifying years if they have enough time between now and state pension age.
Workers needed to have 30 years of qualifying National Insurance contributions to get the old state pension, but they now need to have 35 years of contributions to get the new flat rate state pension.
But even if you paid in full for a whole 35 years, if you contracted out for some years on top of that it might still reduce what you get.
ASK STEVE WEBB A PENSION QUESTION
Former Pensions Minister Steve Webb is This Is Money’s Agony Uncle.
He is ready to answer your questions, whether you are still saving, in the process of stopping work, or juggling your finances in retirement.
Since leaving the Department of Work and Pensions after the May 2015 election, Steve has joined pension firm Royal London as director of policy.
If you would like to ask Steve a question about pensions, please email him at [email protected].
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If Steve is unable to answer your question, you can also contact The Pensions Advisory Service, a Government-backed organisation which gives free help to the public. TPAS can be found here and its number is 0300 123 1047.
Steve receives many questions about state pension forecasts and COPE – the Contracted Out Pension Equivalent. If you are writing to Steve on this topic, he responds to a typical reader question here. It includes links to Steve’s several earlier columns about state pension forecasts and contracting out, which might be helpful.
If you have a question about state pension top-ups, Steve has written a guide which you can find here.
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