Fairer pensions for stay-at-home parents

  A new government white paper will set out plans to introduce a ‘single tier’ pension of around £144 per week which will benefit those to stay at home to look after children. 


The move which has been hailed as the most radical shake up of the state pension for a generation will benefit more than 2.8million women who under the current system receive the lower pension compared with 474,000 men.

Currently those who stay at home to raise their children had received smaller state pensions of around £80 a week, under plans to be published by the Government.

It seeks to redress inequalities in the current state pension system which is said to be particularly unfair to stay-at-home mothers who miss out on making the required 30 years National Insurance Contributions needed to receive a full state pension.

The changes will also benefit those who give up work to care for relatives, often with little choice but to do so.

Research by the Department for Work & Pensions shows women are more likely than men to retire without any savings.  Their private and workplace pensions are also often less generous than men’s because they tend to earn less and take time away from their jobs to have children.

The paper also outlines a radical simplification of the state pension. At the moment, many recipients claim three parts: a basic element, the second state pension and the pension credit - a top-up payment for the poorest old people which is claimed by only 40% of those who are entitled to it.

Ministers hope the new single-tier system will be simpler and encourage more people to save for their old age.  They also hope to dispense with some of the large bureaucracy needed to process the different elements of the current state pension. 

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