PARENTS

More Money For Mums

01/09/2009 15:33 | Updated 22 May 2015

Cash, like sleep, is one of those commodities that we parents never seem to have quite enough of. And if you're scaling back on work in order to care for your family, you may have wondered how this is going to affect you in the long term.

Well, I'm pleased to say that there's some good news on the pension front for parents and carers. Yes I know that you are young and funky now, and pensions are the last thing on your mind. But one day they won't be, and that's when you'll be glad of this.

Basically, what's happening is that the State Pension is changing from next year to help women and carers get more money. It will mean that mums (and dads too but mostly affecting mums) and carers getting Child Benefit for a child up to the age of 12 will be able to build up National Insurance credits and more qualifying years. More women than before will get a full basic state pension.

Here are the details:

HOW THE STATE PENSION WILL CHANGE

• From April 2010, both men and women reaching State Pension age will only need 30 qualifying years of National Insurance contributions to build up a full basic State Pension, rather than the current 39 for women and 44 for men.

• Women's State Pension age will start to gradually rise from 60 to 65 between 2010 and 2020, bringing it in line with men's. Then from 2024 both men's and women's State Pension age will gradually rise from 65 to reach 68 by 2046.

• A new credit will help parents and carers build up qualifying years for the basic State Pension and State Second Pension.

• Replacing Home Responsibilities Protection, the new credits will be awarded each week and can be combined with any paid contributions made when at work and with other types of credits. There will also be no limit on the number of years that can be covered by credits.

• Credits will be available to:

o people getting Child Benefit for a child up to the age of 12;

o foster carers; and

o people caring for 20 hours a week for one or more disabled people

WHAT THE IMPACT WILL BE

• The new system of 30 qualifying years for everyone and the new Carer's Credit will make it easier for people to build up a full basic State Pension.

• Three-quarters of women reaching State Pension age in 2010 will get a full basic State Pension, compared to around half without these changes. By 2025, this will rise to over 90 per cent of women.

• For the first time, it will be possible for a carer to build up a full basic State Pension based entirely on credits.

• Also, one million more people (90% will be women) will be able to build up a State Second Pension.

STEPS YOU CAN TAKE TO PLAN AHEAD

• Get a State Pension forecast by calling The Pension Service or going online. It will show you how many years National Insurance you have and estimate the amount of State Pension you can expect.

• Find the exact date you will reach State Pension age by using this simple calculator on The Pension Service website.

• Use your State Pension forecast to find out if buying back missed National Insurance contributions could give you a bigger State Pension.

• Use the Pension Tracing Service to uncover forgotten private pensions – around £3 billion lies unclaimed in pension accounts. It's simple and free to use.

• Find out if deferring your State Pension is right for you. If you put off claiming your State Pension you can get a higher weekly amount or, if you delay for at least a year, a cash lump sum.

HOW YOU CAN FIND OUT MORE

• Visit The Pension Service website or call 0845 300 0168 for a State Pension forecast.

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