Pension scandal hits 4.5m women

MILLIONS of married women have been hit by a new pensions scandal. At least 4.5m wives are entitled to little or no pension despite having paid National Insurance contributions for years.

A loophole in the rules means contributions they made after they were married - estimated to total at least £8bn - did not buy them any more entitlement. After a lifetime of work, some have ended up with a pension of just 7p a week. Ministers were urged on Tuesday to launch an inquiry into the affair amid claims that the scheme was mis-sold.

The controversy centres on the 'married women's stamp' - a reduced rate of NI contribution introduced after the Second World War. Women who opted for it paid only a third of the full NI contribution. But in return they gave away any entitlement to contributory benefits, including the State pension and unemployment benefit.

However, many claim they were never told they were signing away their pension rights. In many cases, they simply assumed that they had to pay the 'married women's stamp' once they were married. Despite paying thousands of pounds each in NI contributions, many are entitled to pensions of at best just a few pounds a week. These are based on NI contributions made in the years before their marriage.

As a result, hundreds of thousands have been left to rely on the married couple's pension, which they can only claim once their husband turns 65.

A study by the Liberal Democrats has revealed that 4.5m have been affected by the scandal. Researchers at the independent House of Commons library have found that 3m of these women are now 60 or over. The remainder are still of working age.

The researchers also calculated that these women have paid £8.2bn in NI contributions since the mid-1970s alone. There are no reliable records before then.

LibDem pensions spokesman Steve Webb said: 'There is an £8bn rip-off at the heart of the National Insurance system. The Government must launch an immediate inquiry into this mis-selling of pensions. When this happens in the private sector, companies are forced to pay compensation.'

An Age Concern spokesman said: 'These women understood they wouldn't get a full basic State pension but didn't realise paying a reduced rate would mean nothing at all.'

A Department of Work and Pensions spokesman said: 'The married women who opted to pay reduced rate contributions were required to give written notice of their decision on a form attached to a leaflet. The leaflet went to great lengths to describe the consequences of that decision. Married women opting to pay reduced rate contributions had to sign a declaration that they had read and understood the leaflet.'