Missing out under new pensions rules

Pound coinsMargaret (not her real name) has been married for over 30 years. She worked part-time for many years but this work was low paid, and only during teaching terms, so she never built up her record of NI contributions.

During periods of unemployment Margaret did not claim benefits (and therefore credits which would have counted towards her NI record) because her husband was working. Margaret gave up work to look after her husband when he became chronically ill to help him remain working for as long as possible.

They felt they could manage without claiming carer’s benefits (which again would have protected her NI record), but when he did eventually have to give up work as his condition worsened they made sure that he claimed incapacity benefit, purely so that his NI contributions—and therefore, they thought, Margaret’s pension—would be protected.

Margaret’s husband will reach pension age under the present system, with a full contribution record, which they were always promised would also cover Margaret. However at 59 Margaret finds that the pension she had relied upon will no longer exist.

This is because Margaret will claim her state pension after April 2016 when the new single tier pension comes in. While this will be beneficial to many women it will be an individual entitlement with no allowances for those who are married, bereaved or divorced. (Although there will be protection for married women who paid the reduced rate contributions).

This is in contrast to the current system which allows people who are, or who have been, married or in a civil partnership, to use their partner’s record to receive a basic state pension or to increase the amount they receive on their own record.

Age UK has been raising this issue during the passage of the current Pensions Bill. Now that the bill has reached the final stages of parliamentary scrutiny we are again calling attention to this unfairness. We conducted a poll to assess public opinion about this change. We found that eight out of ten older people (79%) oppose this change which will leave 30,000 women reaching state pension age between 2016-2020 with lower pensions.

Of those people surveyed for Age UK, well over half (57%) believe this change is unfair and that people should be able to claim on their partner’s contribution record if their own falls short of giving them a full state pension.  One-fifth (22%) believe that people should rely on their own contributions but that the Government must give people enough notice of the changes so that they can properly plan for their future.

The fundamental problem is that the government wants to change the rules without giving people the time to change their plans. Given more notice these people might have acted differently – for example bought more contributions, signed on when unemployed or applied for carer’s allowance. Age UK’s new research which shows that three in five of those who expressed an opinion (58%) believe the Government should give over 10 years notice of such a significant change in policy, with two in five (38%) stating that the government should give more than 20 years notice.

Age UK is urging the Government to amend the bill to give this group of people sufficient time to adjust their plans.

Find out  more by reading our latest Pensions Bill briefing 

Read consumer advice about money matters on the Age UK website

3 responses to “Missing out under new pensions rules

  1. Just want to follow blog please

  2. Born in Oct 52, so had to buy annuities to fund my pension shortfall from Oct 2012 – May 2015. I will also not benefit from single tier pension in 2016. So much for prudential personal money management.

  3. I was 60 in January this year…I am so distraught, as I have been told I cant receive my pension for another “6 years”
    No one believes it’s happening NOW but it is. The government are not telling people that all these changes have been activated already. Clearly they have a “real hatred” for women born 1953 and 1954

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