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Women and Pensions Fact Sheet

What you can do

The government is proposing some structural changes to the pension system to take into account the fact that women contribute less, for the reasons stated above. It plans to make a full state pension dependent on 30 years’ contribution history, rather than 39 (increasing to 44 after 2010).

Meanwhile, here are some other things you can do:

Find out where you stand. With a state pension, you can get an indication of your likely pension, based on your past work history and your answers relating to future National Insurance Contributions. You can fill in a so-called BR19 form, either online or over the phone.

Details are available here.

For occupational schemes and personal pensions, your employer or pension company should send you a statement every year, telling you not just how much is saved up, but how much you may receive at retirement.

Save more. This might seem a statement of the obvious, but without doing so your position will always remain worse than that of men. There are several ways of saving:

Contribute more into your occupational pension through top-up schemes. For more details in this section, see our Guide to Personal Pensions.

Set up a stakeholder pension scheme. You can pay as minimum of £3,600 a year (£2,808 after tax relief) into a stakeholder pension even if you are not working, with contribution levels set on the basis of your previous five years’ earnings.

If you do not have enough money, persuade your partner to save in a stakeholder scheme on your behalf. If you both survive to an old age and stay together, you and he will both enjoy the benefits of your pension, plus he receives tax relief on the contributions.

Save in an Individual Savings Account (ISA). You can save up to £7,000 a year in an ISA, or £7,300 after April 2008. The income you receive will be free of tax and if you die, the lump sum passes to your dependents. See our ISAs Guide.

Buy back the years. If you have gaps in your employment history not connected with caring for relatives or children up to the age of six, you may buy back “added years” in respect of your pension by making backdated National Insurance contributions.

This will give you a bigger income when you retire. Note that each missing year knocks either 2 or 3 per cent off the basic state pension.

Claim your full entitlements. You may be entitled to Pension Credits system introduced by the government in October 2003. But up to 25 per cent of those eligible for more money fail to claim. Make sure you are not among them.

Also make sure your spouse or partner has nominated you as the person entitled to receive a pension in the event of their death.

Take out extra protection. This means your partner having life insurance in place in the event of his premature death, protecting you and your children where necessary. Cover at death is either paid as a lump sum or an annual income for a defined period. More details are in the insurance section.

Get your pension entitlements at divorce. A court is now entitled consider a spouse’s pensions built up during the course of a marriage as another matrimonial asset to be shared evenly.

More pages

Page 1: Introduction
Page 2: What you can do

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