Pension boost for 500,000 women
Around half a million women are set to benefit from bigger state pensions in light of a shake-up of current rules.
Women currently need to make 39 qualifying years of NI contributions to be eligible for the full state pension - currently £87.30 a week - and 10 years of contributions to be eligible for just 25%.
But, with many women likely to take time out of work to bring up children and care for relatives, it's not surprising that just 35% of women qualify for the full basic state pension, compared with 85% of men.
Although the government is cutting the required number of years of NI contributions to 30 for men and women in April 2010, at the end of 2007 it made a disappointing u-turn on proposals to allow women to buy back missing years.
However, in a further u-turn, it is now proposing an amendment to the Pensions Bill to allow people to buy up to an additional six years of voluntary NI contributions, over and above those permitted under the current time limits.
The proposals will apply to those who reach state pension age between 6 April 2008 and 5 April 2015 and who already have 20 qualifying years on their NI record.
James Purnell, secretary of state, says the move should mean that, by 2010, around 75% of women will be entitled to the full basic state pension, rising to over 90% by 2025.
"This is fair, affordable and straightforward - and it will give more people the chance of a more secure future to look forward to in retirement," he adds.
Christine O’Grady, senior retail media relations executive at Friends Provident, says: “It is great news if more women will be entitled to the state pension but the cost of retirement doesn’t stop there. As people live for longer, it is critical they prioritise retirement planning to ensure they have a stable financial future.”