3-07-03

Millions of women to receive derisory State Pension – Barrett

John Barrett, Scottish Liberal Democrat MP for Edinburgh West, today used questions to the Minister for Women in the House of Commons to highlight the plight of over 1 million married women in their 40s and 50s, who face receiving derisory state pensions in their retirement.

Between 1948 and 1977, married women were allowed to a reduced rate of national insurance contributions, called the "married women's stamp".  Although the right to pay the stamp was removed in 1977, women who were paying the reduced rate were entitled to continue within the scheme.

However, women who paid the reduced rate will receive a substantially reduced state pension as they did not build up any basic retirement pension on their own insurance.  Instead, they will have to rely on their husbands' contribution record.  There are even some pensioners who found on the eve of their retirement that they were only entitled to a few pence per week.

In a statement, John Barrett said:

"With the UK now facing nothing short of a pension crisis, many people are not aware of another impending pensions scandal, the origins of which lie almost 30 years ago.

"Millions of women now face getting derisory pensions when they retire because they paid reduced contributions.  Worst of all, many do not even know about it.

"Although the Government claim women who chose to pay the married woman's stamp made an 'informed choice', there are many of my constituents who say they got nothing in the way of an explanation as to the consequences of their actions.  Furthermore, despite the Government knowing about this problem, they are still allowing thousands of women to continue paying the reduced rate.
Contd

"Many organisations, such as the Support Women Against Pensions Poverty group have been campaigning for years to bring about justice in this area.  However, so far, their words have been ignored by the Government. 

"The Minister for Women has the perfect opportunity to show her worth by pressing her colleagues in Government to take action.  Together, they must write to all women who still pay reduced rate contributions and alert them to their current position.  If they do this now, there might still be enough time for these women to improve their pension by making additional savings."

ENDS

Notes to Editors

1. Figures from the House of Commons Library show that the current value of 'married women's rate' national insurance contributions stands at over £8 billion.

2. At its peak, 4.5 million married women were paying the married women's rate.  The Government Actuaries Department estimate that 1.5 million of these women are still of working age.

3. More information on the Support Women Against Pension Poverty can be found at
http://www.seniorsnetwork.co.uk/swapp/background.htm

4. Over 160 MPs from all the main political parties, supported Early Day Motion 1612 last year which said:

That this House notes that a majority of today's poorest pensioners are women; further notes that among people coming up to state pension age, the majority of those with poor rights to both state and private sector pensions are women; recognises that many women with poor state pension rights at some stage paid national insurance contributions at the reduced rate for married women; is concerned that many such women report that the consequences of this option were not fully explained at the time, and that the scope for buying back missing years of contribution is very limited; is further concerned that many women only discover that they have very state low pension rights when they are close to state pension age; calls on the Government to write to all women below pension age whose national insurance contribution record is incomplete because of payment of the married women's contribution to advise them of their current and future pension entitlement; further calls on the Government to investigate the historic operation of the system of married women's contributions and to consider whether any form of redress might be appropriate for such women; and welcomes the launch of the Support Women Against Pensions Poverty campaign, whose aim is to ensure that present and future generations of women pensioners do not have to live in poverty in old age.