A reader writes...
My wife was born in 1940, and from 1964, when our first child arrived, she spent the next 15 years looking after our two children.
In 1978 she started to work part-time and to pay a Voluntary Class 3 stamp, as we lived abroad at the time. She paid these Class 3 contributions up to 2000, when she turned 60 and started to receive her state pension.
However, she receives just £61 a week. Is there anything we can do to have her pension income improved?
Find out how the Saga Annuity Service, provided by Legal & General, may be able to help you get more retirement income from your pension.
Annie Shaw replies...
Since your wife reached state retirement age in 2000, the pension she receives comes under the old rules, when she needed 39 years' National Insurance contributions to receive a full state pension (there have been two changes in the rules since then).
It looks as if she paid a maximum of 22 years, mostly Class 3 voluntary contributions, meaning the pension she receives falls well short of the amount she would be getting if she had a full contributions record.
First, she should check if she could qualify to have more years credited to her record under so-called “Home Responsibilities Protection (HRP)”.
HRP is an old benefit that has now been replaced by National Insurance Credits. It was available to anyone who, while under state pension age and for full tax years between April 1978 and April 2010, was:
- Receiving Child Benefit for a child under 16.
- A registered foster carer (but only for tax years from April 2003, so this would not apply to your wife).
- Caring for a sick or disabled person (for at least 35 hours a week), who was getting Attendance Allowance, Disability Living Allowance (middle-rate or highest-rate care component) or Constant Attendance Allowance, or...
- Getting Income Support while caring for someone who was sick or had a disability.
In any one year a person could be covered by a combination of these conditions. For example, they could have been receiving Child Benefit for a child under 16 for part of the year, then acting as a registered foster carer for the rest of that year.
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It looks as if your wife has just missed out on HRP since she started work in 1978, when HRP was introduced and paid voluntary NI. But it is worth inquiring if it could cover any missing years since then.
Married couple's pension
Since your wife receives, in her own right, less than a ‘Category B Pension’ – the top-up that married couples and civil partners receive where a dependant does not qualify for a full state pension (sometimes colloquially known as the ‘married couple's pension’), it could also be worth inquiring if she could get this too.
If anyone reached state pension age before April 6 2016 but doesn't have a full pension entitlement, they may still be able to claim the married couple's pension if they aren't already getting it. Visit this web page for more details: The basic State Pension: eligibility and scroll down to the section marked "Married or in a civil partnership".
Until the rules were changed in April 2016, it was possible for a spouse to receive higher pension payments in this way based on their husband’s or wife’s National Insurance contributions – provided they had already reached state pension age.
This was to reflect the fact that in many cases, women spent time out of the workforce bringing up children or looking after elderly relatives.
The so-called married couple’s pension meant that spouses with incomplete National Insurance records could get up to 60% of the full weekly state pension thanks to their partner’s contributions. But this only applied to people who reached state pension age before April 6 2016. Since then, a new system has been in place, which features:
- A higher, flat-rate weekly pension.
- Much more limited ability for individuals to rely on their partner’s National Insurance record to boost their own pension.
- A higher requirement for National Insurance contributions – 35 instead of 30 years’ worth.
The good news for people who have spent time out of the workforce is that it is now easier to get National Insurance contributions credited to your record even for years when you were not employed.
As this government web page: gov.uk/national-insurance-credits/eligibility shows, people who stopped work to bring up children, act as carers for family members, or who were too ill to work, for example, can continue to build up National Insurance contributions. This means they are more likely to be entitled to a full state pension.
The web page explains how you can claim extra National Insurance credits if you come under one of these categories.
Money Expert Paul Lewis' comments: Marriage Allowance not always worth claiming
A lot of readers have successfully claimed marriage allowance, a tax concession that helps couples where one does not pay income tax and the other pays basic-rate tax.
It is worth £220 this tax year, £230 next and can be backdated to 2015/16.
But a few readers have complained they are no better off. That’s because couples can also claim if both pay basic-rate tax. But in that case one gains £220 this tax year and the other loses the same amount.
For them the claim is not worth making.
For more info, search for ‘marriage allowance’ at gov.uk or at paullewismoneyblogspot.com
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