Malcolm Mclean Comments On FOI Request Which Highlights State Pension Shortfalls For Women

New figures provided by the Department for Work and Pensions in response to a Freedom of Information (FOI) request from the Daily Mail have revealed that of the first 1.2million people to claim the new ‘single-tier’ state pension starting next year only 80,000 women will receive the full amount.

In the first ten years of the new state pension, around 2.4million people will miss out on the full rate (forecast  to be about £154 a week) – of which the majority will be women. Many will claim more than under the current system – but still significantly less than they might have expected.

In the first year, around 405,000 people are expected to claim. Just 20,000 women will get the full amount compared to 130,000 men. From April 2017, 30,000 women will qualify against 140,000 men. In 2018, 30,000 women will get the full amount compared to 120,000 men.

The playing field should be levelled by 2020, when equal numbers of men and women are set to receive the full state pension.

Commenting on the figures Barnett Waddingham senior consultant Malcolm McLean says:

“This will come as a big disappointment to many women, especially those fast approaching their retirement age, whose expectations were that a much better deal for them would be forthcoming as a result of the new state pension and that the years of their perceived inequality of treatment with men would disappear.

“Historically women have often stayed a home to rear their children or had other caring responsibilities and have not had the opportunity to go out to work or have only been able to work in part-time or low paid employment and have in consequence have not been able to build up a private pension in their own right. Despite the best efforts of government to improve their lot by providing a range of national insurance credits towards the state pension for caring responsibilities many women still had shortfalls in their contribution record preventing them for qualifying for the full rate of the state pension.

“It was with this in mind that the Government also reduced the number of NI qualifying years required for a full pension for women from 39 years to 30 in 2010. Unfortunately for the new pension they have increased the number of qualifying years needed for the full rate of the new pension from 30 to 35 years for both men and women – but almost certainly with the biggest detrimental effect for women. There is also a new requirement to have a minimum of 10 qualifying years to get even a partial pension and that together with the withdrawal under the new scheme of the right for most women to claim a state pension on their husband’s contribution record (a so-called Category B pension) will also impact on women.

“It is good to note that from 2020 equal numbers of men and women are expected to receive the full state pension. In the meantime for those women who will fall by the wayside there is probably the option of paying for voluntary NI contributions to plug gaps in their record and enable them to improve their pension as a result. Although for most people with an average or above average life expectancy this usually represents a good deal it still requires a capital outlay of about £705 for each missing year, something many women will not feel able or willing to contemplate.”