Women who paid ‘married woman’s stamp’ and have reached pension age since 2016 should check they are receiving at least £77.45 per week
The British welfare state was designed during the Second World War when social attitudes were very different to today. In some respects, the system has evolved considerably since then, for example taking account of the needs of widowers and not just widows, and recognising the status of same sex couples. But in other respects we still see the legacy of the 1940s world view in today’s system.
One example of this is the way in which the National Insurance system affects certain married women.
Back in the 1940s, the assumption was that in a couple it would be the man who was the main breadwinner, whilst the woman’s role was to raise children. The system was therefore designed around men building up state pensions based on their record of National Insurance Contributions and married women being able to claim a part pension by dint of their husband’s contributions. Where married women did go out to work, they were explicitly allowed to pay a reduced rate of contributions – known colloquially as the ‘married woman’s stamp’ – which saved them money at the time but meant they built up no pension in their own right, as if they had been ‘stay at home mums’.
As the system evolved, more and more women ended up paying this reduced contribution with more than four million women on the reduced rate by the late 1970s. But a growing focus on women’s independence and equality meant that assuming women would depend on their husbands in retirement because increasingly untenable. As a result, the government of the day legislated to prevent women opting to pay the reduced rate from 1978 onwards. But the four million women already on the reduced rate were allowed to continue to do so if they wished.
200 women left paying at this rate
The numbers paying the reduced rate have fallen year-by-year since the late 1970s and a new Freedom of Information response I have received recently indicates that there are now just a couple of hundred women left paying at this rate. But far more will have a contribution record negatively impacted by having paid the reduced rate at some point.
When the state pension system changed in 2016, these women could have been at a disadvantage. The new state pension system treats everyone as an individual who draws a pension based on their own record of contributions. In principle, a woman who has always paid the reduced stamp might have got no pension based on her own contributions (as reduced rate contributions do not count towards your own state pension) and also been prevented from claiming a part pension based on her husband’s contributions.
Such a change would have been unfair to women coming up to retirement who had been led to expect that they could claim a part pension based on their husband’s NI record.
People can fall through the net
As a result, a concession was introduced into the legislation for the new state pension. Under this concession, a woman who paid the reduced stamp *at any point in the 35 years up to pension age* can claim a pension at 60 per cent of the basic state pension rate, currently worth £77.45 per week. The Department for Work and Pensions has estimated that about 10,000 women who once paid the reduced stamp are set to benefit from this concession.
In principle, the Government’s computers should do their stuff and this concessionary rate should be paid automatically. But it is not unknown for people to fall through the net and for systems to fail to pick up special cases. I would therefore encourage any woman who has reached pension age under the new rules (ie since 6 April 2016) to check that she is receiving at least £77.45. If she is not, and if she paid the reduced stamp at any point in the previous 35 years, she should contact the Pensions Service and ask them to review her pension rate.
Steve Webb is Director of Policy at mutual insurer Royal London and former Pensions Minister in the Coalition Government
— to inews.co.uk