Six month countdown to State Pension changes

Social Development Minister Margaret Ritchie today launched the countdown to pension reforms which will create a fairer, more generous State Pension.

The Minister in particular is calling for women in their late fifties to find out if they could be missing out on money in retirement.

Traditionally many women have missed out on a full basic State Pension due to a broken work history, caring for children or family members who are disabled or elderly.

From April 2010, both men and women reaching State Pension Age will need only 30 years of National Insurance contributions or credits to get a full basic State Pension rather than the current 44 for men and 39 for women. The introduction of a new weekly carer’s credit will also help mothers and carers build up full records.

Margaret Ritchie said: “In the past many women who were unable to work due to caring responsibilities at home missed out on a full State Pension entitlement in retirement. From April 2010 this will change. The system will be made fairer and more generous, especially for women and carers, so that many more women will be able to benefit from a full basic State Pension.

“It is important that all women are aware of the upcoming changes, how they will be affected personally and the options available to them about how and when they take their pension.”

Women who took time off work to have children from the mid-seventies onwards should take time now to consider their plans for retirement. They can top up the National Insurance years on their record by working from now to State Pension age. Retirement income can be boosted by putting off drawing the State Pension for a few years. They may also wish to consider buying back National Insurance contributions to plug any remaining gaps in their record. Some women can buy an extra six years of voluntary National Insurance contributions to boost their pension by as much as £20 per week.

There are five simple steps that women in their late 50s should consider taking to find out if they can boost their State Pension.
Step one: Make sure you know the exact date when you can claim your State Pension from, as this is changing for women born on or after 6 April 1950.
Step two: Find out how much State Pension you have built up by getting your own State Pension forecast.
Step three: Explore your future work options. If you continue to work past State Pension age you won’t pay National Insurance and will take home more money.
Step four: Think about whether delaying making a claim to the State Pension could boost your income in retirement.
Step five: Find out if buying extra National Insurance contributions could increase your State Pension entitlement.

Notes to editors:

1. The full basic State Pension is currently £95.25 a week. From 6 April 2010, both men and women reaching State Pension age will only need 30 qualifying years of National Insurance contributions to build up entitlement to a full basic State Pension, rather than the current 39 for women and 44 for men. This is part of the wider reform process which aims to make the State Pension system simpler, fairer and more widely available.
2. A new weekly National Insurance credit from April 2010 will recognise the valuable contribution parents and carers make to society by improving their opportunity to build up qualifying years towards the basic State Pension and State Second Pension.
3. Women’s State Pension age will start to gradually rise from 60 to 65 between 2010 and 2020, bringing it in line with men’s. Then from 2024 State Pension age for both men and women will gradually rise from 65 to reach 68 by 2046. These changes are being introduced in response to an ageing population in order to ensure the State Pension is sustainable for future generations.
4. A direct mailing exercise has been ongoing, on a phased basis, from April 2009 to raise awareness amongst women directly affected by the equalisation changes. This will continue until January 2012.
5. People can usually fill gaps in their National Insurance record in the last six years by paying voluntary National Insurance contributions to help boost the level of basic State Pension they will receive. Certain people who reach State Pension age between 6 April 2008 and 5 April 2015, particularly women who took time to have children in the 1970s, may be able to buy back up to an additional six years for tax years from 1975.
6. Further information about the pension changes and services available can be found online at www.dsdni.gov.uk or by calling the Pension Service enquiry line Telephone: 028 9054 9142.
7. For more information on Pensions and Retirement Planning visit www.nidirect.gov.uk On the nidirect website information from all departments and agencies is contained in one place and is written in simple language. It also contains a range of transactions which allows citizens to do business with Government at a time that suits them.
8. Media enquiries to DSD Information Office on 028 9082 9079. Out of hours, please contact the Duty Press Office via pager number 07699 715440 and you call will be returned.