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Last Updated: Thursday, 20 December 2007, 11:07 GMT
Anger as pension reform rejected
Mike O'Brien
Pensions Reform Minister Mike O'Brien has rejected the plan
The government has rejected a plan to let women boost their state pensions by buying up to nine years' worth of extra National Insurance (NI) contributions.

In July, the government indicated it would probably support this, so women could make up for years spent at home looking after children or relatives.

Now the idea has been dropped, angering pension campaigners.

The Department for Work and Pensions defended the move, saying the plan would not help the poorest pensioners.

"Poorer pensioners are likely to be better off under pension credit and would not benefit from paying voluntary contributions," the DWP said.

"Women claiming on their husband's contributions would not benefit unless they were able to increase their own entitlement above 60% of their spouse's pension," a spokesman added.


The current position is that people who miss making NI contributions can buy up to six years more, so long as they are for the immediately preceding years.

The decision not to change the rules was revealed in an answer to a question in the House of Lords this week.

Baroness Hollis, the Labour peer and former DWP minister who campaigned for the change, was furious.

"It is quite wrong that women caring for other people should go into retirement with a lower pension through arbitrary time limits," she said.

"If the government was really determined to deliver this they could find a way," she added.

The charity Help the Aged was equally upset.

"In what amounts to an abuse of Parliament, the government has reneged on a promise to help millions of women and carers reaching state pension age between now and 2010," said Anna Pearson, the charity's policy manager .

"The decision... is effectively a stab in the back for women and carers," she added.


In July, the Lords passed an amendment to the 2007 Pensions Act removing the six-year time bar and letting people buy up to nine years of backdated NI contributions at any time.

What we are looking at are ways of allowing women to buy back-dated national insurance contributions
Mike O'Brien, pensions minister, July 2007

In response, the Pensions Reform Minister Mike O'Brien said at the time that the government would use its "best endeavours to deliver the principles of the amendment".

That was not quite an unequivocal commitment, but he reiterated the position on the BBC's Today programme in July, saying: "What we are looking at are ways of allowing women to buy back-dated national insurance contributions."

About 200,000 people a year take advantage of the current rules, mainly those in their 50s who realise that they will not get a full state pension.

But while 90% of men retire on a full state pension only 30% of women do so, usually as a result of breaks in employment.

More amendments

Baroness Hollis said the government's decision was not the end of the matter.

She and other peers plan to force the government's hand by putting forward amendments to two pieces of legislation that come before the Lords this coming spring - the Pensions Bill and the National Insurance Bill.

The government is already making sweeping cuts in 2010 to the level of NI contributions needed for a full state pension.

From then on, both men and women will need to have paid contributions for just 30 years.

Until then, men will still need 44 years of contributions, while women will need to have paid contributions for 39 years.

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