Women reminded to buy back NI contributions before April 6th

With the cost of buying back years of national insurance contributions (NICS) to make up for years out of employment set to increase on April 6th, Ian Naismith, head of pensions development at Scottish Widows comments: "Women who are currently entitled to buy back their National Insurance contributions must act quickly in order to get the cheapest price. It costs £8.10 a week for extra contributions, but this is set to rise to £12.05 at the beginning of April, leaving not much time at all to get the lower price.

"For women who have had time off work since 1996, buying back these years of unpaid employment could drastically increase their pensions. The first step is to obtain an estimate from the Pensions Service website to see how much state pension you might be entitled to already and you can then decide whether it is worthwhile buying extra.

"This is particularly important for women who reach age 60 before April 2010, when the number of years of National Insurance contributions required to receive the full state pension falls from 39 to 30 for women."

Scottish Widows Women and Pensions Report, now in it's fourth year reveals that women are still falling far short of men when it comes to pensions savings. This ‘pensions gender gap' reveals that 55% of men who could and should be saving for retirement are saving adequately - compared to just 46% of women.

Ian Naismith continues: "Women are much more likely to have inconsistent working patterns than men, and therefore there is more that needs to be done to encourage and support women to save for the long term so that they can sufficiently provide for themselves in retirement."

Scottish Widows has called for the Government to review pension incentives to encourage more women to build up pensions in their own right. The proposals include:

a rebadging of pension tax relief to make it simpler to understand - for example, by making it clear that for every £4 an individual contributes the Government will add in £1;

the ability for pension contributions made by spouses and registered civil partners to be treated as made by the payer rather than the recipient for tax and limits purposes;

limited ability to withdraw pension funds before retirement to meet specified costs; and
an overhaul of means-tested benefits, including a review of the effect on housing benefit and discounting of ISA savings and small amounts of pension from means-testing.