Many women won’t get the full flat rate state pension in 2016

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If you reach state pension age from April 2016, you’ll be able to get a new ‘flat rate’ state pension from today – July 6th if you’re a woman. Men have been able to receive the flat rate state pension since April 6th. But figures from the Department for Work and Pensions show that most of those who will get the full amount will be men, in the first few years. Why will so many women miss out?

Fewer than one in five getting the full state pension will be women

For anyone reaching state pension age before April 6th 2016, they’ll retire on the old ‘two tier’ state pension system made up of the basic state pension and the additional state pension (which itself comprised of the state second pension and/or SERPS). In tax year 2017 – 18, the basic state pension is £122.30 a week. The level of the flat rate state pension is £159.55.

The Department for Work and Pensions (DWP) released some figures and they show that:

  • In the financial year from April 2016 (when the single tier state pension is introduced) to April 2017, only 20,000 women will qualify for the full amount, compared to 130,000 men. In all, 16% of those getting the full single tier state pension are women compared to 84% who are men.
  • The figures don’t equalise until 2022, when 50% of those who receive the full single tier state pension will be women and 50% men.
  • Between 2016 and 2018, the percentage of those receiving the flat rate or single tier pension who are women only rises from 16% to 21%.
  • Fewer than half of those reaching state pension age between 2016 and 2018 (women and men) will get the full flat rate state pension. In 2016, only 37% of those retiring will get the full amount, in 2017 only 42% will, in 2018 only 46% will and in 2019 only 48% will.

The DWP says it’s misleading to compare the figures because far fewer women than men will reach state pension age between now and 2019 and this affects the proportions of people getting the full rate who are women in the early years, making the new state pension look ‘artificially bad’ for women over this period.

Why are women missing out?

There are three main reasons why women won’t qualify for the full amount of the flat rate or single tier pension:

  1. The state pension age for women is rising. The state pension age for women was 60 until April 2010. It’s been gradually rising and is, as I write this, 62 years and 8 months. A second rise in the state pension age to 66 (for both women and men) was passed by the last coalition government. These two rises overlap and so some women are waiting for six years longer than their original state pension age, to get their pension.
  2. You’ll have to have paid 35 years’ National Insurance (NI) to get the full flat rate state pension. Before 2010, women had to have paid 39 years’ NI and men had to pay 44 years. In 2010 that was equalised at 30 years for both women and men. In order to get the flat rate state pension, you’ll have to have paid 35 years. Although this affects men and women, women are more likely to be affected more as they are more likely to have had breaks in their career to look after children or elderly relatives.

SAVVY TIP: Currently, you can claim National Insurance credits if you’ve registered for child benefit, up until your youngest child is 12. Women can claim NI credits if they care for someone else, in some circumstances. You can read more in my articles called State pension and women – your state pension when you’re bringing up your children and Getting National Insurance credits for your state pension if you’re a carer.

  1. You may have been ‘contracted out’ of National Insurance. Contracting out of National Insurance is something that employees (and those with private pensions) were able to do in the past. Contracting out meant paying a lower rate of National Insurance, but it also meant that you didn’t build up an additional state pension (made up of the state second pension and/or SERPS).

SAVVY TIP: The new flat rate state pension is designed to replace both the basic state pension and the additional state pension. So those who’ve been contracted out won’t get the full amount for those years. You can read more in my article called The flat rate state pension if you’ve been contracted out of National Insurance.

Related articles:

10 things you need to know about the new state pension

Further rises to the state pension age – what’s happening?

The flat rate state pension – will you be able to use your husband’s National Insurance record?

Unhappy about your state pension?

There’s a campaign group called Women Against State Pension Injustice 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 It also has a website – WASPI

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