What are married women’s contributions?

Until April 1977, if you were a married woman, you could choose:

• to pay the reduced rate of Class 1 contributions when an employee; and
• not to pay Class 2 contributions when self-employed.

If you chose to do this and you have not paid any full-rate contributions, you will not have built up any basic State Pension on your own insurance and you must rely instead on your husband’s contributions record.

Although this choice stopped in 1977, if you were a married woman who had already chosen to pay the lower rate, you have been allowed to carry on paying at the lower rate unless your circumstances have changed. However, you don’t earn a basic State Pension or get any credits or Home Responsibilities Protection while you pay the lower rate. You will be able to get a State Pension based on your husband’s contributions when you both reach State Pension age and make a claim.

You may be able to improve your State Pension position by choosing to stop paying the lower rate and opting for full-rate National Insurance contributions at any time before you reach State Pension age. You can build up entitlement to the State Second Pension on as little as one year’s full-rate contributions. For more information about the State Second Pension, see ‘Additional state pensions’. But remember that you need at least 10 years of contributions to receive any basic State Pension at all on your own contributions record.

And it is possible to build up entitlement without actually paying contributions. For example, in the 2004/05 tax year, you will not start to pay Class 1 contributions until your earnings are more than £91 a week (the primary threshold). But if you earn between the lower earnings limit (£79 a week in 2004/05) and the primary threshold, you will be treated as if you have paid contributions on those earnings. These contributions will help you build up entitlement to the basic State Pension and to other contributory benefits as well.

If you choose to keep your right to pay reduced-rate Class 1 contributions, you will also:

• not pay contributions on earnings between the lower earnings limit and the primary threshold; and
• be treated as having paid contributions at the reduced rate on those earnings. But those contributions will not build up entitlement to the basic State Pension or other contributory benefits.

To help you make an informed decision, you should get your State Pension forecast. You can contact the Retirement Pension Forecasting Team on 0845 3000 168 and they will fill in an application form for you over the phone. If you have speech or hearing difficulties, a textphone service is available on 0845 3000 169. Or,you can write to the Retirement Pension Forecasting Team, The Pension Service, Whitley Road, Newcastle upon Tyne NE98 1BA for a forecast application form (BR19) and a return envelope.

You can also get form BR19 from your nearest social security office or Jobcentre (details are in your phone book). Or, you can download the form from the resource centre on The Pension Service website at www.thepensionservice.gov.uk

The forecast is based on our knowledge of your current circumstances, and these could change. So your forecast will be most accurate if you are near to your State Pension age. But it is best not to put off applying for your forecast until you are close to State Pension age. That way, you will have plenty of time to make additional pension arrangements to make sure you have the lifestyle you want in retirement.

If you have looked at your forecast and you are not sure what to do for the best, you could get advice from a financial adviser. But remember, if you see an adviser you may have to pay for their advice.

You can get further information about private pensions from the Pensions Advisory Service (OPAS), your employer or your union (if you belong to one). See the directory for details about how you can contact OPAS.

Your employer may be able to give you information on occupational pensions.

If you want to know more about National Insurance contributions, you may find the following Inland Revenue leaflets helpful.

• National Insurance contributions for women with reduced elections (CA13)
• National Insurance contributions for widows or widowers (CA09)
• National Insurance contributions for divorcees (CA10)

See the directory for details about how you can get copies of these leaflets.