October 8, 2019 11:01:00 PM
Newly-retired women are being urged to check whether they could be entitled to a “little-known” state pension boost.
The concession relates to women who have opted to pay a reduced rate of National Insurance contributions (NICs) – known as the “married woman’s stamp”.
Royal London said women should check that they are benefiting from a feature of the new state pension system designed to protect those who paid a reduced rate of NICs under the scheme – which included more than four million women in the late 1970s.
Before the introduction of the new state pension, which applies to people retiring from April 2016 onwards, women could claim a partial state pension based on the National Insurance record of their husband.
The new state pension system is based only on an individual’s own National Insurance records.
When the system changed, this could have disadvantaged women who were expecting to claim based on their husband’s record.
Royal London said a “little-noticed” concession was introduced, which allows any woman reaching state pension under the new rules and who paid the married woman’s stamp at any point in the 35 years before reaching pension age to make a claim based on her husband’s National Insurance record.
The rate payable could be a full basic state pension of £129.20 if they are now divorced or widowed or 60% of the basic state pension (£77.45 per week) if they are married.
Royal London is encouraging women receiving less than these amounts to check whether they paid the married woman’s stamp at any point in the 35 years up to retirement.
If they did, they could contact the Pension Service to see if they are entitled to a higher pension.
To have qualified to pay the reduced rate of National Insurance, married women must have opted in to the scheme before it ended in the late 1970s. Those who were already in the scheme were allowed to continue paying the reduced rate.
A Freedom of Information (FOI) request made by mutual insurer Royal London to HM Revenue and Customs (HMRC) found that, 40 years on, around 200 women are still thought to be paying the reduced rate.
The number of women paying the reduced stamp peaked in 1977/78 at around 4.4 million.
Royal London said the entitlement to pay in only lapses if a woman does not pay contributions for a period of two full years.
Sir Steve Webb, director of policy at Royal London, said: “It is not widely known that women who paid the reduced stamp at any point in the 35 years before they retired, and who come under the new state pension system, can claim a minimum payment under the new system.
“If any woman is getting a substantially reduced amount from the new state pension, she should check if she paid the reduced stamp and contact the Pension Service if she is in any doubt.”