State Pension boost for womenMore women to qualify for full state pension

25 October 2008

Amendment to Pensions Bill mean hundreds of thousands more women will be able to boost their retirement income by claiming the full state pension. 

To qualify for a full state pension (£90.70 a week until April 2009) you must pay National Insurance Contributions for a certain number of years. 

Men retiring before 6 April 2010 need just over 44 years, women just over 39 years. Currently 90% of men but only 35% of women qualify.  Both men and women retiring on or after 6 April 2010 need 30 years. 

Buy back pension years

You have always been able to 'buy back' up to six missing pension years, but an amendment to the Pensions Bill will in future allow people to buy back up to an additional six years in order to try and fill the gap and qualify for a full state pension.

Up to 555,000 people could be affected by these changes which will apply to men and women who reach state pension age between 5 April 2008 and 5 April 2015 and already hold 20 years on their National Insurance record. 

It is estimated that 90% of those who will benefit from this change to the state pension entitlement will be women. 

Announcing the changes, Work and Pensions Secretary James Purnell said: 'This is fair, affordable and straightforward and will give more people the chance of a secure future to look forward to in retirement.'

Pension Advice

Whilst the amendment is good news for lots of people the choice to buy back additional pension years is not necessarily straightforward.

Which? personal finance expert Teresa Fritz said: 'This change will help thousands of women boost their pension retirement income. It will cost around £400 to buy back one missing pension year which for many people is excellent value. However, for those on a low income who will be entitled to pension credit of (currently) at least £124 a week, it may not be a good option, so it's vital to take advice before handing over any money.'

For more details on preparing for retirement and state pension entitlement go to planning your retirement.

In addition, The Pensions Advisory Service offers free specialist pension advice and can help you to decide whether you should buy back missing state pension years.

The Pensions Advisory Service special helpline for women is 0845 600 0806.  The general helpline number is 0845 601 2923.