The Week Unzipped: Women allowed to buy back missing pensions benefit

Published on 25/10/2008 15:19

THE Government has taken steps to improve the plight of women who still require 39 years of National Insurance Contributions to qualify for a full state pension, despite law changes which lower that threshold to 30 for younger women.

It is giving women whose pensions have suffered by staying at home to have children the chance to buy back lost benefit.

It primarily affects mothers due to retire in 2008 to 2010. They can buy back an additional six years' contributions, on top of the six years they can already make good.

This means they should be able to fill a 12-year gap in their 39-year record, although they will still have been required to work or have full credits for staying at home, for 27 years, to receive a full pension in their own right worth 90.70.

They can buy back a year's lost contributions at a current one-off cost of 420, which should provide them with extra pension of 160 annually.

However, the Government has announced it will be increasing the buy-back cost, although it has not indicated by how much.

Savings wiped out

PENSION savers have seen 157bn wiped off their pensions over the past 12 months, according to leading pensions advisers Aon Consulting.

It says the economic downturn is visibly taking its toll on the money that workers have been putting aside for their pension, meaning those who are close to retirement may have to work for longer.

More than 3.7 million UK workers pay money into a stock market-linked money purchase, or defined contribution, pension every month.

In October 2007 the value of defined contribution pension assets stood at just over 552bn, but by October 2008 the value had dropped by 28% to 395bn. This was despite the fact that over the same period of time 6.7bn worth of contributions had been paid into these pensions by employees and employers.

Frosty discussion

TALKS broke down between Iceland and the UK over the plight of thousands of offshore investors who have lost their life savings after the collapse of the Icelandic banks.

Meanwhile, the Icelandic government has asked the IMF for a loan of more than 1bn as the economy moved closer to collapse.

Abraham quizzed

PARLIAMENTARY Ombudsman Ann Abraham will come before the Public Administration select committee on Thursday to be quizzed about her report into Equitable Life which accused the Government of maladministration and called for compensation

Lehman rescue

THE pensions of sacked staff at Lehman Brothers are to be rescued by the Pension Protection Fund, which has taken the collapsed fund into its assessment period.

Nevertheless, not only do scheme members face a wait of up to two years to discover whether their pensions will be salvaged by the PPF, but many of the 2,400 members can expect sharp reductions in their retirement income because of the cap.

Broker banned

THE Financial Services Authority has banned Neil McKay, a broker based in Lancashire, after he was found to have cancelled contracts insurance without customers' knowledge or approval and kept the premiums himself.

McKay also failed to disclose in his application to work for Ideal Insurance that he had been sentenced to eight months' imprisonment in 1996 for obtaining property by deception.

Post office wait

PRESSURE is mounting on the Government to announce a decision on the future of the Post Office card account.

Pensioners and those claiming benefits use the card to collect their money and it provides many post offices with business.

The final decision will be taken by the Department for Work and Pensions.