AEGON: Pensions Bill amendment

AEGON UK welcomes the news that the Government wants to amend the Pensions Bill to allow women approaching retirement to benefit from an increased basic state pension.

Currently people can buy back additional years of national insurance contributions within 6 years of the missed tax years to help them build up more income from their basic state pension.

The DWP has today tabled an amendment to the Pensions Bill which will allow people reaching state retirement age between 2008 and 2015 to buy an additional 6 years of national insurance contributions. The proposals will apply to those who already have 20 qualifying years on their National Insurance record.

Rachel Vahey, Head of Pensions Development at AEGON says: "This change will greatly help a significant number of stay-at-home mothers and carers who, due to their inconsistent working patterns, have not been able to build up a full basic state pension. If the amendment goes ahead, they will be able to take steps to increase their basic state pension retirement income. It's heartening to see the Government has listened to the industry and is willing to make changes to pensions that reflect the way people live their lives today."

At the moment, women only receive a full basic state pension after building up 39 years of national insurance contributions. For men the figure is 44 years. Consequently, given time out of work to care for families, only 35% of women today receive the full basic state pension.