Work and Pensions written question – answered at on 19 December 2005.
To ask the Secretary of State for Work and Pensions by how many years qualifying national insurance contributions would have to be reduced in order that 90 per cent. of newly retired women would receive a full basic state pension in their own right.
The information is not available in the form requested.
Home responsibilities protection (HRP) reduces the number of qualifying years needed for a full basic state pension by up to half, so the precise number of years an individual requires will vary according to the number of years of HRP awarded. However, departmental administrative data indicates that if a full basic state pension were paid to those who have the equivalent of at least 10 qualifying years, approximately 85 per cent. of newly retired women in March 2005 might receive the full basic pension. This may overestimate the reduction in qualifying years needed for a particular proportion of newly retired women to receive a full BSP in their own right, due to the way in which HRP interacts with qualifying years.
Women's basic state pension records are continuing to improve with the combined effect of increased labour market participation and HRP, so in the future a much more modest reduction in qualifying years might be needed to achieve the same outcome. We estimate on the basis of the current system that by 2025 men and women reaching age 65 will have similar basic state pension entitlements.
Notes:
1.The answer is based on 2004–05 departmental administrative data which provides information about the amount of basic state pension (BSP) in payment. 2.The answer includes an approximation of the proportion of women at state pension age in March 2005 who made a late claim or deferred their state pension entitlement. 3.Currently women normally need 39 qualifying years for a full BSP and 10 qualifying years to get the minimum BSP, at least one year must derive from paid NICs. In 2020, when SPA for women is raised to age 65, the number of qualifying years for women will equalise with men, increasing to 44 for the full BSP and 11 qualifying years for the minimum BSP (which is 25 per cent. of the required qualifying years for a full BSP over a person's working life). The administrative data does not hold information on the entitlements of those who fail to qualify for the minimum BSP. 4.The figure is based on those women with the equivalent of 10 or more qualifying years. This includes women who have at least 10 qualifying years from paid Nl contributions, or a combination of contributions and Nl credits as well as women who have some home responsibilities protection HRP on their record. For example, a women with 19 years of HRP and 5 years of paid contributions is entitled to the same amount of BSP as a person with 10 years of paid contributions only. 5.The data set does not break down how the BSP is accrued (for example the number of years of paid contributions, credits or HRP). For this reason, the answer should be treated as approximate only. 6.The answer is based on women aged 60 in March 2005 resident in Great Britain.
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