Over the years, far fewer women than men have retired on the full state pension. There are several reasons for this. Find out more about the history of the state pension.
1. The old age state pension was first introduced in 1909
It was paid at a rate of five shillings (25 pence – equivalent to approximately £21.50 today), but only to those who earned less than £21 a year. Anyone who earned more than £31 and ten shillings a year didn’t get it and it was reduced on a sliding scale for those who earned between £21 and £31 and ten shillings. The state pension age was 70.
SAVVY TIP: You had to live in the UK for at least 20 years in order to get the state pension. You couldn’t get it if you’d made yourself poor in order to qualify for it, or if you’d been in prison or convicted under the ‘Inebriates Act’!
2. The state pension age was reduced in 1940
In 1940 legislation was passed to reduce the state pension age to 60 for women and 65 for men.
3. The ‘Married Women’s Stamp’ or reduced rate of National Insurance was introduced in 1948
In 1948 National Insurance was introduced, which would pay for the state pension and NHS, among other things. However, the system was designed to ensure that women who didn’t work could still get a (smaller) state pension based on their husband’s National Insurance contributions record.
SAVVY TIP: This isn’t because women didn’t want to work — a number of employers asked women to leave their job as soon as they got married and this continued — with some employers — until the 1970s.
Women who did work could either pay the full rate of National Insurance, or a reduced rate that paid benefits if they were injured through an industrial injury, but didn’t let them build up a state pension in their own right. This was called the reduced rate of National Insurance or the Married Women’s Stamp.
4. The Married Women’s Stamp was abolished in 1977
However, women who were already paying the Married Women’s Stamp by April 5th 1978 could stay on this lower rate of National Insurance. But women who weren’t already paying it didn’t have the option to choose it.
SAVVY TIP: Government figures show that in 1978 over four million women were paying the reduced rate of National insurance (45% of those who paid NI). By 2001 this had fallen to 80,000 women and by April 2011 only 3,000 women were paying it.
5. Home Responsibilities Protection (HRP) was introduced in 1978
This reduced the number of years that women had to pay National Insurance for in order to get a full basic state pension while they were bringing up their children. However, it never reduced the number of years you needed to pay NI below 20. You could get an HRP credit for every full tax year that you claimed child benefit and looked after your child up to the age of 16.
SAVVY TIP: HRP only counted towards your basic state pension (not the SERPS or state second pension) until 2002. After 2002 it counted towards the basic and additional pension if your child was aged up to six. But it wasn’t until 2010, when National Insurance ‘credits’ for parents and carers were introduced, that you could build up the basic and additional state pension if you were looking after a child aged up to 12.
6. In 2010 the number of years you needed to have paid National Insurance to get a full basic state pension reduced to 30
Before April 2010, women had to pay (or be credited with) 39 years of National Insurance to get a full basic state pension and men had to pay or be credited with 44 years of NI. From April 2010 the government reduced it to 30 years for both men and women.
7. The coalition government increased the state pension age to 66
In October 2011, the coalition government passed legislation to increase the state pension age by October 2020. Before then, the state pension age wasn’t due to increase to 66 until 2026. This rise in state pension age is affecting women far more than men because their state pension age is increasing twice (see below).
8. Legislation to increase the state pension age for women to 65 was passed in 1995
The government passed legislation in 1995 (part of the Pensions Act) to equalise the state pension age for men and women at 65. That meant that the state pension age would rise for women by five years.
The idea was that the state pension age rise would be phased in between April 2010 and 2020, giving women age least 15 years’ notice of the rise in state pension age and time to prepare. The problem was that the equalisation of state pension ages was so badly publicised that many women didn’t realise that they’d be affected.
9. From April 2016, you need 35 years of National Insurance to get the new flat rate or single tier state pension
There’s a new state pension for people who reach state pension age from April 2016. It’s approximately £160 a week at the full rate. You’ll need to have paid 35 years of National Insurance in order to get the full amount. If you’ve been contracted out of National Insurance for any of those 35 years, you’ll get less.
10. Women can no longer claim a state pension based on their husband/ex husband or late husband’s NI record
Under the new state pension system, women can’t claim a state pension based on their husband or civil partner’s National Insurance record if they claim the new — flat rate — state pension.
SAVVY TIP: There is an exception, which is that any women who’ve paid the married women’s stamp at any time during the last 35 years before they reach state pension age will be able to claim a state pension based on their husband, ex husband or late husband’s National Insurance.
Unhappy about your state pension?
There’s a campaign group called Women Against State Pension Inequality or WASPI, which has a WASPI Facebook page which you might be interested in getting involved with or finding out more about. They’re also on Twitter under @WASPI_campaign
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