By Malcolm McLean
Chief executive, Pensions Advisory Service
Women will have to wait longer for their pensions
The new tax year sees the start of some very important changes to the state pension system, especially for women.
Changes are being made to the qualifying conditions for receiving the state pension, and also the ages at which it comes into payment.
Both of these changes come into effect from Tuesday 6 April 2010.
For those women who reach their state pension age on or after 6 April 2010, the number of qualifying years of national insurance (NI) payments needed for the full basic state pension (BSP) of £97.65 a week will reduce from its present level of 39 years to 30.
A qualifying year is one in which you have paid or had credited to you sufficient NI contributions.
If you have less than the full number of years required you will receive a corresponding proportion of the full pension, subject to a minimum of 25%, below which no pension at all is currently payable.
A similar change will apply to men who at present need 44 qualifying years to get the full pension but who will, from the same date, now only need 30 years.
Although the reduction is greater for men than it is for women, it is women who stand to gain most from the change.
Lifestyle and other factors mean that a much lower percentage of women than men currently qualify for the full BSP in their own right.
The change will help to redress the imbalance between men and women, though it will not apply to those women (or men) who have already reached their state pension age, or who will do so before 6 April 2010.
More changes lie ahead, points out Malcolm McLean
In fact, the changeover point at midnight of 5 and 6 April has been described rather graphically as a "cliff edge".
And which side of the cliff you are on depends entirely on your date of birth, not when you actually retire from work - which for this purpose is completely irrelevant.
For example, if a woman reaches her state pension age (60) on 5 April 2010 she needs 39 years of NI contributions; if her birthday is one day later on 6 April she needs only 30.
The government has responded to criticisms of unfairness in this respect by pointing out that the change could not be brought in earlier than 6 April 2010, and to phase it in from that point onwards would simply disadvantage more people, not fewer.
And there are other changes coming in from 6 April which will be of particular benefit to women.
Notably the scrapping of the minimum 25% rule and the replacement of the old, and little understood, Home Responsibilities Protection arrangements with a new and improved system of NI credits for carers.
All this should add up to a better deal for women in relation to the state pension.
State pension ages
Although many more women will qualify for a better state pension in the years ahead, they will unfortunately have to wait longer for it.
At the moment women can claim their state pension from age 60 but between 2010 and 2020 their state pension age (SPA) will increase to 65 to bring it in line with men's.
This will be phased in gradually starting on 6 April 2010.
It means that women born between 6 April 1950 and 5 April 1955 will rather strangely have a SPA at a set date somewhere between their 60th and 65th birthdays depending on their date of birth.
Once they have reached parity with men, women's pension ages will be subject to further increases already announced and enshrined in legislation.
Between 2024 and 2026, between 2034 and 2036 and between 2044 and 2046 the SPA for both men and women will rise to 66, 67 and 68 respectively.
These changes will affect those born after 6 April 1959.
It should perhaps be pointed out that the issue of longer term changes to the SPA are now the subject of political debate.
At the most recent Conservative party conference proposals were made to raise the SPA beyond 65 earlier than currently planned.
For men the increase from 65 to 66 would happen from 2016.
For women the existing phased changes up to 65, between 2010 and 2020, would remain in place but the age would rise again to 66 from 2020.
These are of course just proposals at this stage and any implementation of them will depend on the outcome of the forthcoming general election.
To check your own SPA under existing plans log on to
and use the State Pension Age calculator.
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