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Last Updated: Tuesday, 17 July 2007, 12:20 GMT 13:20 UK
Minister tips more pension reform
Mike O'Brien
More pension reforms may come in November, said Mr O'Brien
The government has hinted it may bring forward more reforms to the state pension system to benefit women.

Men and women who retire from 6 April 2010 will only need 30 years of national insurance (NI) payments to get a full basic state pension.

The government is now considering a system for women to buy additional contributions if they still fall short.

The Pensions Minister Mike O'Brien said he might bring forward such a plan in November's pre-budget report.

"What we are looking at are ways of allowing women to buy back-dated national insurance contributions, and we hope to have a look at this in our pre-budget report in November," he said on the BBC's Today programme.

Fewer contributions

Until 2010, men will still need 44 years of contributions, while women will need to have paid in for 39 years to receive a full state pension.

we are sympathetic and keen to find a way to improve the situation
DWP spokesman

Mr O'Brien's comments came in response to complaints from the Liberal-Democrats that the reforms will not benefit people who retire just before the changes are due to take effect.

"If you are 60 on 6 April you are fine but if you were born on 5 April you don't benefit at all from the new rule," said the Lib-Dem spokesman Steve Webb.

Mr Webb claimed that some women might miss out on 25,000 worth of extra pension payments during their retirement, citing calculations by the House of Commons library.

The issue may be discussed in Parliament this afternoon when the House of Commons debates a number of amendments set down in the Lords to its Pensions Bill.

One of them proposes that women be allowed to buy up to nine years of extra NI contributions to help them get a higher state pension.

"We don't actually support the amendment," said a spokesman for the Department of Work and Pensions.

"But we are sympathetic and keen to find a way to improve the situation," he added.

Cliff-edge

The government says that when its new pension rule starts in 2010, the number of women eligible for a full state pension will rise immediately from 50% to 75%.

But it argues that phasing in this change, or starting it earlier, would simply cost too much or lead to other women losing out.

"This cliff-edge issue is a real one but is not easy to solve," said Mr O'Brien.

The pensioners who are thought most likely to miss out on the new rule are women who stopped work in the 1960s and 1970s to bring up children before the pension system was changed to credit them with extra NI contributions.

The government claims that to bring in the 2010 change two years early would cost an extra 160 million a year from today.


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