HC Deb 23 February 1994 vol 238 cc238-9W
Mr. Burden

To ask the Secretary of State for Social Security (1) what assessment he has made of the number of married women who revoke the election to pay reduced rate contributions in the latter years of their working life, in the belief that there may be some significant gain, yet still have to rely on category B retirement pension or an addition paid to their husband;

(2) how many of women claiming a category B retirement pension in each of the last five years had revoked their election to pay reduced contributions either five, four, three, two or one year before retiring; and if he will estimate the value of the contributions they paid;

(3) in how many cases an adult dependant addition paid with invalidity benefit has been adjusted to take account of a category A retirement pension which is being paid to a wife who revoked her election to pay reduced contributions within five years before retiring; and what is the value of contributions paid by these married women.

Mr. Hague

This information is not available and could be obtained only at disproportionate cost.

Mr. Burden

To ask the Secretary of State for Social Security what guidance he has issued to the Contributions Agency and the Benefits Agency concerning advice to be given to women considering revoking the election to pay reduced contributions in the latter years of their working life; and what reference is made to the impact which the husband's benefit circumstances may have on the financial benefits available.

Mr. Hague

It is open to any person, including women who have elected to pay reduced rate contributions, to request information about their contribution record or a forecast of the expected state retirement pension from the Benefits Agency. If a women has elected to pay reduced rate contributions, the pension forecast will tell her that if she wishes to improve her benefit position by paying more years of full contributions, she will have to cancel her election to pay reduced rate contributions. From then on, she would be able to pay contributions which do count towards retirement pension, subject always to her achieving a minimum entitlement of 25 per cent.

If a women seeks advice about the advantages of cancelling her election, Contributions Agency staff have instructions to recommend she obtains a pension forecast. They will also give her as much information as she wants about her national insurance position but without influencing her decision in any way. Taking account of her own circumstances, a women should decide for herself whether to keep or cancel her election.

If approached, the CA will suggest that she bears the following points in mind:

  1. (i.) the relevant costs of paying full rate and reduced rate contributions;
  2. (ii.) whether she will qualify for a basic pension and how that will compare with the pension she will receive on her husband's insurance when he reaches pension age and retires;
  3. (iii.) how long she will have to wait to receive a pension on her husband's insurance;
  4. (iv.) whether she will qualify for an additional pension and, if so, how much;
  5. (v.) the effect of contracted-out deductions on the additional pension if she is paying towards an occupational pension scheme;
  6. (vi.) if she anticipates qualifying for short-term benefits, the contribution conditions for the award of such benefits and the relevance of cancelling her election from the beginning of a tax year.

Additional information is available in leaflet NI1— national insurance choices for married women, available from local Social Security offices. This explains to women that they can qualify for a basic pension on either their own or their husband's contributions but they cannot get two pensions.