June 2008

Taking care of the carers

Dear Editor,

Everyone should welcome the recent announcement that the Government is encouraging those who missed national insurance contributions to boost their state pensions through claiming back gaps in their national insurance contributions from 1996 onwards. The change will benefit many women, particularly those who currently have fewer than ten years of national insurance contributions or credits, and so are not entitled to any state pension.

However, the announcement demonstrates again how complicated the pension entitlement rules are, especially for those who spend time out of the paid workforce caring for others.

The Scottish Widows 2007 Women and Pensions Report found that one in three women of working age (35%) do not have a pension scheme. This compares with just 22% of men. Only 45% of women aged 30-50 are in full time employment compared to 82% of men. Women are much more likely than men to be wholly or largely dependent on state pensions.

The Government's role remains critical though and this announcement shows that it is taking its responsibilities for women's pensions seriously. A number of issues remain, including the one highlighted by Baroness Hollis, of those who have spent most of their adult lives in caring roles and don't now have the opportunity to build up enough national insurance contributions or credits to qualify for any state pension. Her proposal to allow up to nine years to be bought back from any time in the individual's working lifetime won widespread support, but was ultimately rejected by the Government. While the reasons for the rejection may be sound, it would be good to have a workable alternative to resolve this problem.

Ian Naismith
Head of Pensions Market Development
Scottish Widows