Pensions apartheid: How women are missing out by being born on the wrong date

As many as 110,000 women retiring this year could lose more than £20,000 of state pension over their remaining years simply because they were born on the wrong date. Rules coming in next month will create a ‘pensions apartheid’ between people who were born just months apart, campaigners warn. Women who turn 60 before April 6 this year will qualify for only three-quarters of the state pension - around £75 a week - if they have worked for less than 39 years. But a woman who turns 60 on or after April 6 can claim the full state pension of £97.65 for working just 30 years. The difference adds up to around £10,400 over ten years, and more than £20,000 if they live to the average life expectancy of 81. Only those who have paid extra to top up their National Insurance contributions will be exempt from having their pensions docked. Men could also be caught out by the change, but it is expected to mainly affect women because they are less likely to have clocked up three to four decades in National Insurance contributions. Campaigners have urged ministers to make an emergency alteration to the rules and phase in the changes instead. The anomaly is a result of the Government trying to make it easier for people to qualify for the basic state pension. Men currently have to work 44 years to qualify for the full national state pension while women have to be in paid employment for 39 years. But from April 6 this year both men and women have to work for only 30 years. The change was introduced to help those women who have lost out on making National Insurance contributions because they took time out to raise children or care for elderly parents. But rather than phasing in the policy, the changes have been introduced on a set date, creating what critics call a pensions ‘cliff edge’ between women whose retirements fall on either side of April 6. Those who have worked between 30 and 39 years and who turn 60 before April 6 will be the worst affected by the changes. The alarm was raised by LibDem work and pensions spokesman Steve Webb. He said: ‘The changes are entirely welcome and long overdue. ‘But they create a “cliff-edge” for those who reach pension age immediately beforehand. ‘Many could lose out on £10,000 over ten years simply for being born a few days too early. Big changes like this should be phased in.’ Figures from the Office of National Statistics show that some 369,000 women reach 60 every year. Parliamentary answers received by Mr Webb suggest that of those around 110,000 women will retire having worked between 30 and 39 years and so will still not receive their full entitlement unless they pay top-ups. Dot Gibson, general secretary of the National Pensioners Convention, said: ‘Millions of older women don’t have a full state pension because they were raising families or working part-time and didn’t make 39 years’ worth of National Insurance contributions - but they might have enough years if we applied the 30-year rule. ‘Unless this is done we will see a new pensions apartheid.’ The Government defended the changes, saying they would allow far more women to qualify for the basic state pension. By 2025, it is estimated that 90 per cent of all women will qualify for the full pension. For bespoke pension advice contact Credencis We are situated near to Derby, Leicester, and Nottingham. Credencis “Live for today, Invest for tomorrow”