Hundreds of thousands of married women in their sixties who get no state pension could get one using rules which are so complex even the Department for Work and Pensions has been getting them wrong. This article explains these rules and who can benefit from them. If you are a married woman in your sixties or very late fifties you may be able to get a pension – or a bigger one – and perhaps a backdated payment of thousands of pounds. But it must be stressed that not all married women can make use of these rules and some of those who can will in fact end up no better off.

Each year thousands of women reach the age of 60 but do not get a state pension because they have not paid enough National Insurance contributions at work. To get a full pension a woman normally needs to have paid contributions for 39 years. If she has paid for ten years she will get about a quarter of a full pension, £22.70 a week. But if she has paid for only nine years she will get nothing. It is very unfair but that is the way the rules work at the moment (they will be very different for people who reach pension age in 2010 - see Box).

The latest figures from the Government indicate that more than half a million women now in their sixties reached pension age with no entitlement to any state pension. Many of them – well over half – could pay extra National Insurance contributions now and get a pension of their own. How much they have to pay and what they will get depends on their circumstances. National Insurance contributions can normally be paid up to six years late. However, at the moment they can be paid right back to 1996/97 and up to the tax year before she reaches 60. So women now in their sixties can pay several years’ contributions to get a pension or boost one they already have. Almost all of them will have paid some full contributions in the past – often before they were married – and that will give them a start towards the ten years they need.

The gap is filled by buying Class 3 voluntary National Insurance contributions. They cost between £309 and £405 a year. Once she has paid ten years’ contributions the pension is about a quarter (normally in fact 26%) of the full pension. At current rates that is worth £22.70 a week or £1180 for a full year. That will last for life though may be of no benefit once the women’s husband reaches 65 (see ‘older husbands’ below).

Women who already get a state pension but not a full one may find it worthwhile to pay extra contributions to boost the pension they get. Each year’s contributions above ten will increase their pension by £1.75 or £2.62 a week (it is a matter of chance which it is).

When extra contributions are paid the pension can normally only be backdated to the date the contributions were paid. However, two groups of women can get their pension backdated to the age of 60.

• Women who made a claim for a pension at 60 and were entitled to Graduated Retirement Benefit (paid on contributions made between April 1961 and April 1975) or to some additional pension (also known as SERPS or State Second Pension) earned from April 1978.
• Women who were not entitled to any Graduated Retirement Benefit or SERPS

A third group who had an entitlement to Graduated Retirement Benefit or SERPS but did not claim it at the age of 60 are in a slightly different position. They cannot get their pension backdated to 60. Instead they will get a slightly bigger pension because they did not claim it at the time. Part of that increase in their pension can be commuted to a lump sum.

Married woman’s contributions
Some women will find they cannot fill the gap in their record. When the present system of pensions and National Insurance began in 1946 married women were assumed to be financially dependent on their husband. So they were allowed to pay a lower rate of National Insurance contributions – called then the married woman’s stamp. Currently this lower rate is 4.85% of their earnings between £100 and £670 a week. But it does not count towards qualifying for a state pension. Worse than that, paying the reduced contribution means she cannot now pay a full contribution for that tax year to make it count towards her pension. Women who paid this lower rate have a gap in their record but it cannot be filled. That means many women who worked in the ten years before pension age paying the reduced rate will find they cannot pay extra contributions now to get a pension.

Means-tested benefits
A woman whose husband claims a means-tested benefit such as pension credit, council tax benefit or housing benefit will find that any extra pension she claims reduces the means-tested benefit he gets. In most circumstances as a couple they will be left better off though not by the full amount of her pension. But in rare cases where their joint income as a couple is less than £139 a week they may end up no better off – though they can never be worse off.