New effort to boost women's state pension

glitterkitty

basically there was a pension reform in 1975. before that, national insurance was paid in a different way. (the actual 'stamp')
After 1975, the class 1 , 2 , 3 and 4 that we all know was introduced.

I decided to ask someone i work with who worked in NICO before 1975 to clarify this!
There are paper records from before 1975, but as the NI was paid in a different way, and there was a pension reform, it cannot go back further than that.

mrbnewc1

National Insurance did exist prior to 1975, it's just way that it was recorded that changed, i.e. the days of sending back stamp cards (RF1) stopped. Instead they were recorded via employer returns.

For the purposes of calculating state pension, they take the pre 1975 contributions/credits and divide the total by 50 and then round up the nearest whole number e.g. 367/50=7.34 - rounded up to 8. These are then added to the any qualifying years post 1975. All is taken into account with the calculation - nothing is missed (except married woman's stamp obviously).

EdInvestor

mrbnewc1 wrote: »

For the purposes of calculating state pension, they take the pre 1975 contributions/credits and divide the total by 50 and then round up the nearest whole number e.g. 367/50=7.34 - rounded up to 8. .

That's actually fairer than the post 75 system for people with partial NI years. It would also seem to make it simple to work out if for people can buy additional years.

After all a person starts accruing NI credits from a specific age, say 16, so if they are aged, say 30 in 1975 and have accrued a total of say 10 NI years (by the method mentioned above), then surely it should be possible for them to buy up the 4 missing years?

mrbnewc1

I agree that the pre 75 system does benefit those who didn't have full years as you add contributions/credits up and divide by 50. I only mentioned this to show how those contributions are used in calcuating state pension. Glitterkitty has rightly said that these years won't be revisited as result of the changes being brought in.

The adding up the contributions from all tax years does not apply from 1975. From 1975 each tax year is individual and you have to have earned above a certain amount in that tax year for it to be qualifyng towards state pension. As long as you have earned at or above this level you are classed as having 52 weeks which is what is needed to make the year qualifying. If you have less than the 52 weeks's worth, HMRC work out how many weeks' Class 3 volutary contributions you need to pay to bring it up the 52 weeks. This amount depends on whether you have any earnings in that year or not.

margaretclare

mrbnewc1 wrote: »

National Insurance did exist prior to 1975, it's just way that it was recorded that changed, i.e. the days of sending back stamp cards (RF1) stopped. Instead they were recorded via employer returns.

Ah, that explains a lot.

I remember my mother, who died in 1975 having received her full pension for 3 years, buying these stamps weekly at the post office and sticking them in herself, carefully writing the date across each stamp. She did 'casual domestic work' and the first employer she worked for in the week was supposed to do this for her, but was too lazy (upper-class women who'd have had their noses wiped for them if they could). I've had it said to me by another woman whose mother had died at a similar age, that it 'wasn't worth her paying in all those years, she got nothing out of it' and this woman (a tutor with CAB would you believe!! chose to pay the 'small stamp' because of, as she saw it, it wasn't worth it for her mother). I disagreed and I took entirely the opposite view.

In fact I remember a woman in the village I grew up in who always paid her own stamp, bought them weekly at the post office, although she never went out to work!! I've heard her talk about 'wanting a pension of her own, not to be beholden to Mister'.