Pensions for stay-at-home mothers

THE Tories will today offer a major pensions boost to women who stay at home to look after their children. Conservative pensions spokesman David Willetts will promise to scrap the rules that penalise thousands of women who take career breaks.

And he will offer the prospect of an automatic State pension for all, regardless of how many years a worker contributes. The changes are part of a package Willetts says is needed to make the pensions system 'family friendly'.

The Tories would abolish the rule that bars those who have worked for fewer than ten years from receiving the basic State pension. Instead, everyone who has paid National Insurance contributions would receive a pension. To make the system more flexible, Willetts will offer better pension rights to those who take time off to look after children or sick relatives. Under the current system a woman would lose pension rights for a particular year if she spent only a few months at work before leaving to have a baby.

In another change, the Tories would also make it easier for people who have not made National Insurance contributions in previous years to 'buy back' their pension rights.

And in a move aimed at low earners, the Tories will look at lowering the £79 a week earnings threshold to allow more people to qualify for the State pension.

In a speech to the Left-leaning think-tank the Institute for Public Policy Research, Willetts will say: 'The pension system as it exists today is biased against women. It was designed for the days when men earned their pensions by work and women by marriage. It is much less well suited to a modern world.

'We need to modernise it so that it offers a fairer deal for women. We are going to make the rules for contributory pensions family-friendly for the first time. We will offer women a better deal by properly recognising the contributions they make at work and at home.' Pensions Secretary Alan Johnson said last week that he was considering similar reforms. Michael Howard will give more than £10bn back to the taxpayer if the Tories win the next General E, it has emerged. The Tory leader will make tax cuts the centrepiece of the party's manifesto.

They could include taking thousands of low-income workers out of tax altogether by raising allowances, exempting estates worth up to £1m from inheritance tax and abolishing stamp duty for properties under £150,000. Howard is resisting pressure from backbenchers to give details in case his ideas are stolen by Labour.