Pensions boost for family-first women

WOMEN who take time out from their careers to bring up children or look after elderly relatives are to get help to boost their State pensions.

Harriet Harman will outline plans this week to benefit women who end up with meagre pensions because they had to give up work for a time.

The Government is proposing to top up their State pension pot to cover the years when they did not make National Insurance contributions.

The minister will tell Labour's women's conference: 'Women are not choosing either to be career women or to be housewives. They are trying to combine both. It is no good saying we really value caring work if you then clobber women in retirement.'

The State pension is based on how many years of National Insurance contributions are made during a working life.

Women need 39 years of contributions to qualify for a full pension of £77.45 a week. Men need 44 years.

However, most women's careers - and National Insurance contributions - are interrupted when they start a family.

Each year of missed contributions reduces the pension a woman gets at 60. The amount lost will vary according to individual circumstances. But a woman who has built up only ten years of contributions can receive as little as a quarter of the full State pension - less than £20 a week.

Anyone with fewer than ten years of contributions does not qualify for any pension, despite possibly having paid thousands of pounds in National Insurance.

The Government already offers some help to women who break off from work while raising children or looking after elderly relatives.

Home Responsibility Protection treats women as if they had carried on making contributions during their years out of the workplace.

However, critics say the scheme is too complicated and excludes millions of women, including those who have paid the reduced rate 'married woman's stamp'.

Labour first promised to tackle the problem more than a year ago in its Green Paper on pensions. Its inaction has attracted growing criticism from pensioner and women's groups.

While Harman will promise to act, ministers have still not decided how long a woman can take off work and still get a full State pension. But anything less than a couple of years will be dismissed as unrealistic.

Age Concern said last night it wanted to see the details before passing judgment. 'Any sort of concession or recognition of the problem women face would be welcome,' a spokesman added. 'It is very difficult for women to build up 39 years of contributions. Those missing years can have quite an impact on their pension.'

Maurice Fitzpatrick, of accountants Numerica, said the scheme would particularly help low-paid women without an occupational or private pension.

He said it should be relatively straightforward to introduce the changes, but added: 'It's difficult to know how much the scheme will cost until we know how many women are eligible and how much help is on offer.'