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Pension boost for married women

By Paul Lewis
BBC Radio 4's Money Box

Minister for Pensions Reform, Mike O'Brien
Mike O'Brien also looked into home responsibilities protection allocation

A government minister has admitted that thousands of married women may not be getting their full state pension.

Pensions Minister, Mike O'Brien, says up to 73,000 women could get on average 1,400 in backdated payments.

And a "significant number" of women are getting too little pension because the time spent caring for children or adults has not been taken into account.

Liberal Democrat MP, Steve Webb, who has campaigned for this group, welcomed the change.

Potential claimants

Mike O'Brien told Money Box on Radio 4:

"We've identified around 73,000 married women who could potentially claim some backdated pension to cover the period between turning 60 and her husband reaching 65.

"We don't know how many could be entitled to this backdated sum but they could get up to 1,400 each."

I am excited about this... Many women have no knowledge how the system works
Malcolm McLean, Pensions Advisory Service
The women affected will have reached 60 between 6 April 1998 and 24 October 2004 and be married to a man who is less than five years older than them.

They must also have a gap in their contribution record in some of the years between 1996/97 and 2001/02, which they can now fill.

If the cost of paying the contributions to fill the gap is less than the extra pension the contributions will provide, then the Department for Work and Pensions will offset one against the other and send them a cheque for the difference.

Positive reaction

Malcolm McLean, chief executive of the Pensions Advisory Service said,

"I am excited about this.

"We know from calls we took on our women and pensions helpline that many women have no knowledge how the system works - it is so complex."

He gave an example of a woman helped by his service: Mrs D.

This is of course entirely welcome and is progress, but I would like them to look across the board
Steve Webb, Liberal Democrat MP

She was 60 in May 2004 - she got a reduced pension of 28.38 a week.

If she paid contributions to fill six years' gap between 1996/97 and 2001/02 - that would cost 1,976.

But her pension would be boosted to 45.35 a week and the arrears amounted to 3,267.

The DWP did the sums and sent her a cheque for the balance of 1,651.

Women who reach 60 on 24 October 2004 or later have to pay up first and then wait for the arrears.

More to do

Steve Webb, Liberal Democrat MP for Northavon says many more groups of women could be helped.

"This is of course entirely welcome and is progress, but I would like them to look across the board, not just for these 73,000.

"I reckon there are another 200,000 women not getting their full pension who should pay extra contributions."

The DWP is also looking for what Mike O'Brien called "a quite significant number" of women whose pension is lower than it should be because the department has failed to take into account time spent looking after children or caring for a disabled adult.

This home responsibilities protection (HRP) is often not allocated correctly.

"The DWP and the Treasury have started urgent work to identify those people who have been affected.

"It will involve reviewing the national insurance records of thousands of women over state pension age."

Any married woman under the age of 70 who does not get a full state pension should contact the department to see if she can pay extra contributions to boost her pension.

Two new leaflets explaining the rules are on the DWP website.

BBC Radio 4's Money Box was broadcast on Saturday, 19 April 2008 at 1204 BST.

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