Married Women's Pensions (Hansard, 15 October 2002)

§ The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham)
My Lords, the number of married women on the reduced rate stamp, which was 3,500,000 in 1978 and is now 80,000, will be 3,000 in 2010. We have no plans at this stage to review the rates.

§ Baroness Greengross
My Lords, I thank the Minister for that Answer, with which I have some sympathy, despite my former role with Age Concern. I think the Minister knows that. No one paying reduced contributions could expect to get the same benefits as people who paid the full stamp. It is not like the scandal that affected inherited SERPS in 1999–2000. However, many women probably did not fully understand the rules or their impact. After all, who does? Even the noble Lord, Lord Lawson of Blaby, a former Chancellor of the Exchequer, admitted that pensions were extremely complicated.
Is there any possibility that women adversely affected by ill informed decisions made prior to 1977 will be allowed to buy back their missing contribution record or, at least, part of it, given the 25 per cent rule? That would go some way to addressing their concerns and help with their problems.

§ Baroness Hollis of Heigham
My Lords, the noble Baroness has a proud record, particularly on issues such as inherited SERPS. However, I cannot help her on this issue. This is a pay-as-you-go scheme. Most married women who continued to enjoy the reduced stamp after 1977–78 did well financially out of it. Obviously, that was not the case for some individuals. To recalculate now on a PAYE basis and decide whether there were adverse consequences would be difficult practically, and I am not sure that it would be fair. It would be like saying that a married woman who opted to pay the full stamp in 1978 but who, over the next 25 years, had low or intermittent earnings—with the result that her state pension was no higher than she would have got on her husband's contribution—should also be allowed to revisit her choice. We cannot do that.

§ Baroness Turner of Camden
My Lords, is my noble friend the Minister aware that there are anomalies in the situation? For example, a woman can qualify for a pension on her husband's contributions. However, if she reaches 60 before he reaches 65, she will have no pension, as she must wait until he is 65. That leaves women with no pension at all.

§ Baroness Hollis of Heigham
My Lords, my noble friend is right. As your Lordships will understand, the problem is that the reduced married women's stamp dates back to 1948 when the presumption was that women were dependent on their husband's earnings and on his pension. The assumption behind the situation described by my noble friend is that, if the husband is under 65, he will still be in work and his wife will enjoy the support of his wages.

§ Earl Russell
My Lords, can the Minister say what benefits, if any, were received by women who paid the reduced contribution after 1977? What was done to explain the situation after 1977 to women? Does the Minister accept that it is no excuse for not remedying an injustice to say that it is only a little one?

§ Baroness Hollis of Heigham
My Lords, I am not saying that it is an injustice. Most women who took the reduced married women's stamp saved thousands of pounds—something like £18,000 for someone on mean average earnings over that time. If such a sum had been invested, it would have produced an alternative return.
The noble Earl also asked what women knew. I have a copy of the leaflet that I had when I chose to continue with the reduced married women's stamp. It says, in bold type: The contribution choice… Why your choice is important". It goes on to say: The choice you make about paying contributions can effect your future entitlement to benefits such as maternity allowance, sickness, invalidity and unemployment benefits and retirement pension. This is explained in paragraphs 12–21 of this leaflet and you should read these carefully before you make up your mind". That is in the simplest conceivable English. It certainly allowed me to make an informed choice at the time.
The noble Earl's first question was about the benefits enjoyed by people who took the married women's reduced stamp. They receive statutory sick pay, statutory maternity pay, industrial injuries benefit and the 60 per cent of the pension that goes to the wife of a man who makes a full national insurance contribution.

§ Baroness Billingham
My Lords, I was one of the people in the predicament of having to opt back in. Does the Minister agree that there was enormous publicity about the perils of not re-entering the full system, not only in leaflets, but in media of every description—newspapers, radio and so on? None of us was left in any doubt about the outcome.

§ Baroness Hollis of Heigham
My Lords, I am grateful to my noble friend for making that point. Women first entering the labour market in the 1960s and 1970s had to sign to elect to receive the reduced stamp; secondly, in 1977–78, they had all the information described by my noble friend; thirdly, they received further information in 1989; and, fourthly, they were given further information in 2000 associated with the changes in the lower earnings limit. So, on four occasions, married women paying the reduced stamp received fairly straightforward—I do not say that it was brilliant—accessible information on which to make an informed choice.