State Pension Loophole Boosts Women’s Retirement Income


Thousands of retired women can boost their state pensions by exploiting a little known loophole that dates to the 1940s.

Written into state pension rules is a married women’s concession that allowed spouses to pay a reduced national insurance rate but opened a door for them to claim a reduced state pension based on the NI payment record of their husbands.

Sometimes, the reduced payment was called ‘the small stamp’.

The number of women paying the stamp reached a peak of around 4 million in the late 1970s.

Entitlement to pay for new applicants for the stamp was abolished in 1978, but those already in the system could continue with the concession.

Claim up to £6,700 a year

The concession is still open and only lapses if the married woman is divorced, earns less than £118 a week, is self-employed or stops payments for two years. Few are still doing so.

However, thousands qualify for the partial state pension offered by the concession.

Any woman who paid the married women’s stamp at any time in the 35 years before reaching state pension age can make a claim based on her husband’s NI record.

If the couple are still married, the wife is paid 60% of the basic state pension – £77.45 a week or £4,027 a year. If women are divorced or widowed, they will receive £129.20 or £6,718 a year  – the full state pension.

Financial provider royal London reckons around 10,000 newly retired women are entitled to make a claim under the concession.

Rule was designed in the 1940s

“It is amazing that in designing a state pension system in the 21st Century, the government had to include special rules to protect women affected by a rule designed in the 1940s,” said Royal London policy director Steve Webb.

“It is not widely known that women who paid the reduced stamp at any point in the 35 years before they retired, and who come under the new state pension system, can claim a minimum payment under the new system.

“If any woman is getting a substantially reduced amount from the new state pension she should check if she paid the reduced stamp and contact the Pension Service if she is in any doubt.”

Find out more about the married woman’s concession or small stamp

To make a claim get in touch with the Pension Service

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