Thousands of mums to benefit from pensions windfall

| November 13, 2007 | 0 Comments

Thousands of women who became stay-at-home mums are set to benefit from a pension windfall. Protests have meant that the Government has given in to demands to close a loophole which meant women who gave up work to raise their children missed out on credits that would increase their pensions.

Tens of thousands of women could qualify for extra cash, with average payouts of around £3,000. Ministers have promised to search through masses of social security records going back over 30 years to identify how many women are owed money.

For many of those who have reached retirement age, this money could help ease the struggle to pay for food and heating costs.

The issue focuses on the payment of Home Responsibilities Protection (HRP), which was introduced in 1978 to build up the basic state pension for those who swapped a career for motherhood.

In general, a person needs to work for 39 years to have sufficient National Insurance contributions to qualify for a full state pension. But HRP reduces the number of years needed - meaning women who stay at home to raise children are not penalised.

For each year a mother claims Child Benefit, a year should be knocked off the number of working years required - up to a maximum of 19. For example, a woman who quit her job for 16 years to raise a family would only need to work for 23 years to pick up the basic state pension, which is currently £87.30 a week.

However, errors and omissions at Government departments have resulted in tens of thousands of women missing HRP entitlements. It is believed that the problem is due to National Insurance records being held at a different Whitehall ministry.

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