Monday, October 25, 2010

The £140 pension

Don't get me wrong, I'm all for it.

But, I'm one of the thousands of people who have paid voluntary payments to make up for the gap in their National Insurance record. That option, by the way, is open to anyone not paying NI compulsorily, such as a full-time mother, and it can be done later, when she is back at work. Furthermore, a lot of the women pensioners, who are not receiving full pensions, voluntarily elected to pay the lower NI "married woman's rate" when they were working, knowing that it would deprive them of a pension.

That's not to say that the present system is fair to women who are full-time carers, but the fact is that it is possible to get a full pension even if you have gaps in your employment, and there will be a lot of people who took care to cover those gaps feeling they might as well not have bothered.

4 comments:

Richard T said...

There's also a lot (like me) who paid up to cover gaps in the contribution record some time ago before the reduction in the qualifying period to 30 years. I have to say that I'm simply glad that the government is planning to ensure that all those who for whatever reason couldn't or didn't make provision for a state pension will get it rather than having to rely on the caprices of a means test to get be able to live.

Anonymous said...

You seem to be implying that the issue of you having made top-up contributions voluntarily is a reason for not doing anything about the pension system.

As I understand it the rules about making topup contributions are not open-ended - normally you can only top up for the past 6 years unless you are due to reach State Pension age between 6 April 2008 and 5 April 2015.

The facility for married women to pay reduced rate contributions ceased in 1977 for women starting employment then - women already paying the reduced rate could choose whether or not to continue. Personally I chose to continue saving the money elsewhere and am now receiving b-gg-r all in interest on it. But it was my choice with which to live.

Anyway I think you are jumping the gun - there isn't even a green paper on this yet and no doubt steps can be taken to deal with anomalies. Your best bet - instead of moaning based on assumptions is to make you views known to Professor Webb.

Jane said...

See my next post on this. The Guardian report was inaccurate, relying on a report in the Mail. As I understand it now, the actual changes proposed abolish the earnings related element of the pension, but don't get rid of the need for a full contribution record to get a full pension.

I'm in favour of the change (as I did say in the Post). But, unlike anonymous I elected to pay the full NI rate, not the married women's rate. It was a choice and choices have consequences.

The government has published a half-formed plan in the hope of a good headline after the CSR, but one which will suggest to many people that they have saved through the NI system in vain. Criticism is inevitable. If no comment was wanted until the green paper was published, then they shouldn't have made the announcement.

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