Women urged to check state pension entitlement to avoid missing out on £7,000

Campaigners will head to the High Court on Wednesday for a judicial review into how the government raised the retirement age for women.

Some retired women who paid the so-called “married woman’s stamp” in their early career could be missing out on thousands of pounds a year in state pension payments because they are unaware of a concession under the new pensions system, a former pensions minister has warned.

Steve Webb, who was pensions minister under the coalition government, is calling on these women to check their state pension income and ensure they are getting their full entitlement, which could be worth nearly £7,000 a year.

The affected women would have been part of a National Insurance system designed in the 1940s, which assumed they would rely on their husbands in retirement. It allowed them to pay a reduced rate of National Insurance contributions (NICs) – known as the “married woman’s stamp” – in return for a partial state pension based on their spouse’s NICs.

But the new state pension system brought an end to this for any women who retired after 6 April 2016.

Recognising this could disadvantage some women, the Government introduced a concession entitling them to either £4,027 and £6,718 a year – depending on their circumstances – in state pension.

The Department for Work and Pensions (DWP) said it issues these payments automatically, but Mr Webb warned some women could fall through the system’s cracks. This threatens to leave them out of pocket as they are unlikely to know about the under-publicised provision, he said.

“It is not widely known that women who paid the reduced stamp at any point in the 35 years before they retired, and who come under the new state pension system, can claim a minimum payment under the new system,” said Mr Webb, who is now director of policy for mutual insurer Royal London.

“If any woman is getting a substantially reduced amount from the new state pension she should check if she paid the reduced stamp and contact the Pension Service if she is in any doubt,” he added.

The “married woman’s stamp” system was widespread and in the 1970s, around 4.4 million women were taking advantage of it as a way to boost their salary. But the assumption that women would depend on their husbands in retirement was also becoming increasingly untenable and from 1978, the reduced NICs rate was cut for new married women, Mr Webb told i. However those already paying it were allowed to continue if they wished.

According to a Freedom of Information (FOI) request by Royal London, about 200 women still pay reduced NICs today.

Concession worth at least £77.45 a week

The new state pension, which prevented people from claiming a pension based on their spouse’s NICs, risked leaving women with nothing in terms of state pension payments unless a special provision was created.

The Government decided that women who paid the married woman’s stamp at any point in the 35 years before reaching pension age should be entitled to a full basic state pension of £129.20 if they are now divorced or widowed, or 60 per cent of the basic state pension – £77.45 a week – if they are still married.

Around 10,000 women today, according to an estimation from the DWP, could benefit from the pension rates.

Mr Webb said: “If you have retired since April 2016, you’re getting less than £77 a week and paid the married woman stamp at any point in the last 35 year, you should be checking.

“The rules have changed and it’s important [women] realise there is a protection for them. Because of the scale of the National Insurance system, it’s not implausible to think people could have fallen through the cracks.”