Pension overhaul - women no longer able to claim based on partners contributions

(44 Posts)
Portofino Mon 06-May-13 18:25:34

link

This one leapt out at me because it mentions women aboard, the ones who have have never lived in UK and the "closing a loophole" phrase was used. That on the surface, seemed fair enough, but after further reading it appears this will affect all women in the UK , (and presumably men) who have never made any personal NI contributions.

It seems like more deflection, blame the foreigners so we ignore what the Govt are actually doing kinda stuff. Or did I misunderstand.

gettingaway Mon 06-May-13 18:33:31

So what happens to the pension someone has been contributing to if they die? Is it kept by the govt?

This is coming in in 2016 I believe? So there will be couples out there who have assumed the wife would be entitled to a pension and now (only three years from retirement) do thy discover that won't be the case. Yup - another cracking Tory policy.

Makes it all the more important that women sahming claim child benefit or at least register so their NI contributions are protected. If you are unemployed at any point you need to sign on for the same reason.

Wuldric Mon 06-May-13 18:34:14

I do agree with you that on pensions (as on tax) there is a whole lot of spin and concealment of the facts.

Hopefully this will have a limited impact as the whole system is being overhauled from 2016.

Portofino Mon 06-May-13 18:35:49

I am not sure to be honest.

Portofino Mon 06-May-13 18:38:34

I have always worked so admit to being a bit clueless as to what happens re. Pension provision if you stay at home/are disabled/never work...

pointythings Mon 06-May-13 18:42:17

I think this is going to be another policy disaster like the child benefits withdrawal, to be honest. It will disproportionately hit women who have chosen to be SAHM. And it's easy for the government to say that these women would have had the opportunity to work and contribute after their DCs had left home, but it isn't easy to get into the workplace with zero experience or qualifications.

Cigarette packet, back of, anyone?

(Disclaimer: I have always worked and don't get child benefit because of DH's immigration status so have no stake in this - just an opinion and some compassion for those going to be hit by this).

SirChenjin Mon 06-May-13 18:45:22

It won't hit you providing you claim CB or register to protect your NI contributions. When you claim SMP it is made clear on the forms that you need to do this.

For decades the Conservatives have promoted the idea that women whould stay at home and look after their families. Traditional values and all that good stuff.

And now they are going to shaft these 'traditional couples' who made the decision 30 or 40 years ago that one partner (almost always the woman!) would not work outside the home, on the understanding that in the event of the man's death, his pension contributions would continue provide an income for his wife.

In any other context this would be breach of contract, fraud, or even theft.

And the pathetic and transparent attempt to blame 'foregners who have never paid into the system in this country' for the ihntroduction of this measure is utterly contemptible. It WILL affect many many women and men in this country and possibly leave some people destitute.

Portofino Mon 06-May-13 18:54:31

Yes, and the foreigners are relatively few really. The slant on this story really bother me.

AnnoyingOrange Mon 06-May-13 18:56:51

The pension is only worth £66, which no one could live on anyway. So I would assume that they would always need another income source as well in order to live

SirChenjin Mon 06-May-13 18:56:57

The new pension will provide a flat rate of c£7K for everyone who's spent at least 35 years caring for children or the elderly. It's an individual pension and current pensions will be unaffected.

AuntieStella Mon 06-May-13 18:59:40

That's not quite right, lapsedpacifist.

Independent taxation of married women was introduced to UK in 1990, when Thatcher was PM.

As HRP (in its variously named guises) was introduced in the 1970s, and this measure only reaches back as far as 1981. There has been no 'SAHM gap' for a generation, despite the concept being trotted out from time to time (sometimes by politicians who really should know better).

Viviennemary Mon 06-May-13 19:02:12

I heard just a snippet of the end of this and it was talking about women who lived abroad so I assumed it just meant them. But already men and women are getting separate pensions which is a good thing. But if a person's contribution may have to also provide a pension for a partner then it is only logical that everyone's contribution will have to go up.

Women know that if they don't work the required number of years they can't be entitled to a full pension. Don't they?

2rebecca Mon 06-May-13 19:21:01

This should be better for working women though who usually have a husband with his own pension and would rather pay smaller contributions and just get a pension for themself plus spouse/ dependent benefit if they die early, rather than fork out more to provide a pension for their spouse who doesn't need it. If some people want to put money aside for stay at home spouses they are still free to pay into savings accounts, pensions should just be for the individual paying into them.

Portofino Mon 06-May-13 21:28:03

Is that how it work though Rebecca? I don't pay smaller pension contributions because I have a husband.

Portofino Mon 06-May-13 21:32:02

In fact I must have a better pension than him as he worked off shore for many a year, and took 4 years out to do a degree as a mature student. Whereas I (fingers crossed) will do 45 years of full employment. I have done 25 and know I am sailing in the wind with regards to the future.....

Viviennemary Mon 06-May-13 21:33:00

I don't think it does work like this. You don't pay a smaller or larger contribution to the state pension depending on whether or not you have a spouse. And I don't know any other sort of pension that works like this.

Portofino Mon 06-May-13 21:33:56

Though it does frighten me somewhat that I have worked for 25 years, as I feel about 21.

janey68 Tue 07-May-13 07:24:33

You would think so wouldn't you Vivienne? But the statistics do show that a scary percentage of women are not clued up about pensions and have woefully inadequate provision.

Viviennemary Tue 07-May-13 16:21:39

But will £140 a week be enough for people to live on. If they have savings they won't be entitled to reduced community charge (except the reduction for single person if they live on their own) or any other benenfits.

badguider Tue 07-May-13 16:29:53

surely sah parents in the uk don't rely on the 'married person allowance' anyway? do they not all register to receive child benefit or make voluntary ni contributions?

Stay-at-home parents are entitled to make contributions of up to £2,880 per annum into a stakeholder pension which the government then tops up to make a total of £3,600. I use a SIPP for mine but there are a lot of providers of stakeholder pensions.

Surely non-working people should be making some provision to protect themselves, if only from a divorce scenario if nothing else. Obviously I am not talking about people who do not work due to illness or disability.

Viviennemary Tue 07-May-13 17:23:40

These NHS credits for SAHM's are only able to be claimed for 16 years. This may sound like a lot but what about the other 19 years if somebody never works. And also what about SAHM's who have a fairly high earning husband with a private pension and then they split up. Where do they stand then. I think it's a minefield and people don't realise.

Viviennemary Tue 07-May-13 17:26:11

I mean National Insurance credits not NHS credits.

Ilovemydogandmydoglovesme Tue 07-May-13 17:30:47

What about if you have Child Benefit paid into a joint account?

Would that take me into account? I haven't worked in nearly seven years and can't see it being logistically possible in the near future either.

I can pay NI contributions seperately though can't I?

Portofino Tue 07-May-13 21:44:12

I think you can do top ups. I am keen to look at topping up the years dh missed. If anyone knows about this, info would be much appreciated. At the moment, if UKIP don't have their wicked way, I can transfer my uk pension credit to Belgium. At least as far as I know.

RobinBedRest Wed 08-May-13 12:29:10

Ilovemydog - you will be fine as long as it was YOU who completed the cb forms so the money is being paid to you and you get home resp credit for those years.

2rebecca Wed 08-May-13 12:41:40

If you divorce then pension contributions are regarded as part of "the couple's" pot to be split between them.

2rebecca Wed 08-May-13 12:47:43

I agree that married women don't pay a reduced pension contribution, that is what is unfair about the current system where those of us who both work pay higher pension contributions to benefit the SAHM brigade. I think that if you want to pay a higher amount so your spouse gets something that should be an additional extra, the basic occupational pension should just be for the person doing that occupation. There are also life insurance policies, savings accounts etc that could benefit SAHMs if only 1 earner.

Ilovemydogandmydoglovesme Wed 08-May-13 15:26:35

I will have to check that as I don't know.

Can I change it if not? Although I can just see dh letting me have the CB to spend as I like! Probably best to leave it in the joint account.

Viviennemary Wed 08-May-13 16:00:53

The SAHM brigade as you put it, won't be getting a full pension. And also won't get any pension till their husband is retirement age if they have insufficient contributions of their own. And won't get anything from their husband's contributions when the new rules come in. So they will be reliant on the 16 years they can claim for looking after children. don't think a lot of people in this situation fully realise their position.

harbinger Wed 08-May-13 18:41:22

This is coming in THREE year's time.

It's all very well spelling it out to someone in their twenties but how can someone in their fifties make this up?

DOOMED

Moving the goal posts yet again......

harbinger Wed 08-May-13 18:53:27

SirChenjin SMP forms of thirty years ago? I do not think so.

Where and how does one register for NI contributions?

dotnet Thu 09-May-13 21:20:20

The overseas wives thing is pernicious - did you see the Skype interview with the British man living in the Philippines with his Philippino wife (I've got a horrible feeling those spellings are wrong in all sorts of ways, but I can't be bothered to look for a dictionary, sorry). She is expecting a reduced pension based on her husband's contributions, should he die - and why should she not? He's done the grafting he needed to do, and doesn't expect her to be left destitute.
I was in my first job when the option for married women to pay a full 'stamp' came in, if I remember rightly. Some of the married women chose to carry on as they were, paying national insurance at the cheaper, 'married woman's rate'; they knew that meant they wouldn't get a full pension in their own right, and chose not to change over. So, pulling the rug from under their feet (those women will be in their 70s now) - is outrageous. There will be many thousands of women out there like that, who made their pension decision in all good faith in the 1970s. This idea sounds like an accident waiting to happen. Please put me right if I've misunderstood!

By the way, those people who are asking about doing national insurance top ups, I think you'll find your way to the right place if you start by putting national insurance additional voluntary contributions into the search line.

RobinBedRest Fri 10-May-13 10:30:34

I don't think changes affect people already retired so those in their 70s won't be affected.

Bramshott Fri 10-May-13 10:35:14

It's very bad news for anyone in their 50s who continued to be a "housewife"/voluntary worker once their children left home, of which I imagine there are legions of people out there. Fine while their husband is still alive and drawing his pension, but what about if/when they're widowed?

Xenia Fri 10-May-13 12:07:40

As it is a moral good to get more women into the workplace and fewer as domestic slaves at home anything which disadvantages the housewife is a jolly good thing. However they are not proposing to remove NI credits for those who keep house. As someone said above you will be able to claim for 16 years or whatever as a stay at home parent and get your NI credit. But you will need 35 years of NI including that 16 to obtain the full £140 a week pension so if you choose not to work but clean his house and shirts for 20 years on top of 16 years bringing up his children then you need to force him to make provision for you instead as you have sacrificed so much on the altar of male ego to wash and clean at home for 35 - 40 years.

However most women do work and many work over the £7k national insurance limit or whatever the level is for much of their lives so will build up enough NI to draw the £7280 a year state pension as they will have 35 years of NI contributions including NI credit from the times including now when being home to look after children counted for such credit.

This is yet another reason why women should never give up full time work and should aim to out earn their other half as it is much more fun and protects your state pension rights and might even enable you to build up your own private pension too.

janey68 Fri 10-May-13 12:31:42

While I wouldn't put it quite in Xenia's style I agree with the point that if you choose to not work for a long period of time such as years after the children are in school or even left home, then you need to be aware of the implications financially. A lot of women bury their head in the sand over the pensions issue, or make assumptions (such as that husband will Always be around and will outlive them)

Taking the example of the man in the Philippines (or wherever it was).

He has paid in the same contributions as a single person. His wife has made no contributions at all.

Why should his pension cover two people? Single people or households with two workers both paying NI are subsidising that. I agree with another poster who (I think I understood as) said

if you pay in a single persons contribution then why should you expect your contributions to cover another, non-contributing person, after you die? If, like everything else from medical insurance, life assurance, holiday insurance, most personal pensions; you want another person to take the benefits, then you need to pay extra in to cover that other person.

Xenia Fri 10-May-13 13:38:21

It is a fascinating issue of our times - we do we pay tax and NI so there is a safety net there in case we ever fall on hard times which may not happen and keep those contributions low like some states or do we have very expensive higher NI and very high contributory benefits like a lot of the EU has whereby if you work very hard for many years you gain a valuable entitlement. We are a half way house here. I almost feel we should abolish NI as the concept is outdated including employer NI (and stop taxing employers as their penalty for taking people on) and in its place remove the state pension from everyone except those who need it. If you don't have a private pension then yes you get the £7k a year or probably better £10k whether you've made contributions or not and have a benefits cap at say £10k not £26k including housing for old and young.

niceguy2 Fri 10-May-13 17:33:19

I totally agree that we should merge NI & income tax into a single rate because the whole concept of NI paying for our future retirement is now ridiculous. It does nothing of the sort.

But in reality no government is going to be brave enough to do that because most people would simply perceive their income tax rate going up even though in reality their take home pay is the same.

Viviennemary Fri 10-May-13 18:19:01

If a man wishes his wife to be covered then he should pay the extra and not expect other working people to make up the difference. As has been pointed out, one contribution equals cover for one person. Not two people because one has made the decision not to work.

GoblinGranny Fri 10-May-13 18:48:54

I do agree that if the NI payments are for one person, that's what the expectation should be, and that if the decision is for one to be a SAHP, then the couple need advice as to how to sort out provision so that both end up with a pension.
You only have to read MN to realise how fragile the hope is that you and your partner will be together during retirement, and relying on that hope for a basic income is very unsure.
As an adult, you need to work out how to look after yourself as an individual.

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