Rows begin over state pension reform as campaign group claims many women are losers not gainers

14th January 2013

An argument has broken out over whether women will really benefit from the reforms to the state pension even as we await full details of the reform.

The reform is due for implementation in 2017 and involves a lot of complicated changes though the goal is that once the system is introduced, pensioners and the government will benefit from a much simpler system with the Government claiming that women with a full employment record will benefit in particular.

It is likely that those with ten years of National Insurance contributions will receive a state pension though to receive a maximum state pension you must have a maximum of 35 qualifying years.

The suggests the range for the new state pension entitlement will be between £162 a week in 2017 for the full 35 year contributions (roughly adjusted to 2017 from today’s expected proposal of around £144) to perhaps just above £46 a week for the minimum entitlement of 10 years from 35 (also roughly adjusted to 2017). 

The Work and Pensions Secretary Iain Duncan Smith has set out his view that this is good for women. He said: “This reform is good news for women who for too long have been effectively punished by the current system. The single tier will mean that more women can get a full state pension in their own right, and stop this shameful situation where they are let down by the system when it comes to retirement because they have taken time out to care for their family.”

The government estimates that 750,000 women who reach pension age in the decade after the new system is introduced will receive an extra £9 a week which does add to a significant boost.

However, the left-leaning National Pensioners’ Convention has branded the changes a con trick – reported in the Guardian – because to qualify for the full amount women will have to contribute for 35 years.

It suggests that large numbers of women who have already retired – as many as 5 million women would benefit from the new system but will not be included. It also is concerned about the increase in the state retirement age which will rise to at least 68 in the 2040s though many expect this to happen much earlier.

The Government is arguing that in pure monetary terms, many woman will be several hundred pounds a year better off. However employees and employers could face higher national insurance bills and those who have built up many years of entitlement in the state second pension and its predecessor SERPS are likely to lose out as will those in defined benefit schemes. The losers are more likely to be higher earners and more likely to be men. But we still await full details in the white paper itself. More on this story later. 

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