Pension victory for women over top-ups

Over half a million women could benefit from changes to the pension bill currently going through Parliament. They will be able to buy back up to 12 years of contributions to fill in gaps in their National Insurance record, enabling them to then qualify to receive the full state pension. Currently only around a third of women reaching state pension age qualify for the whole amount.

Though women only need to have 39 years of contributions at the moment, compared to 44 years for men, the breaks from work many women take to raise children or care for another family member means a pensions shortfall is much more common among women – 90 per cent of men get the full whack.

The proposed changes will affect both men and women who reach state pension age between 5 April 2008 and 5 April 2015, enabling them to plug much bigger gaps in their National Insurance record. The reason for doing this is that the cost of buying the extra entitlement is usually much less than you’d get back from the state over the full length of your retirement.

None of the changes apply to you if you reached pension age (60 for women, 65 for a man) before April 2008. And complicating the calculation of whether you would really be better off is Pension Credit, a separate system that kicks in for those on low incomes.

More on this story from the BBC

The Pensions Service – official information from the government

Pensions Advisory Service - independent non-profit source of information.

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