A reader has asked how the State Pension is paid to a married couple, prompting an explanation of the rules. The question comes as the Labour government considers changes to the pension system under a proposed review.
Under the proposals, from 2030 the State Pension would no longer rise by the highest of 2.5%, average earnings, or inflation, but instead by the highest of inflation and 2.5%. The pension would continue to rise, but at a slower rate than at present. Savings from the changes would go towards creating a National Care Service, aimed at tackling the cost families pay for care and reducing pressures on the NHS.
Individual pension payments
Les, posting on the independent Facebook group State Pensions UK, said: "I'm curious, my State Pension forecast is £241.30 (when I'm pension age) my wife's is the same. I'm wondering if we get a set amount for a couple or if we both receive our own separate pensions per week. Sorry to sound stupid but I can't find anything online about it."
Site admin Libby replied: "The State Pension is calculated on an individual basis, based on our personal NI record. There is no longer a 'married' pension. However, if any couple needs to apply for Pension Credit, that is means tested on a household basis."
How the new State Pension works
The rules were changed on April 6, 2016, for people who reach State Pension age from then onwards. This applies to men born on or after 6 April 1951 and women born on or after 6 April 1953.
According to the government: "The old rules (which include basic State Pension and Additional State Pension) were complicated, making it difficult to know how much you’d get until you were close to State Pension age. With the new State Pension, people will know from a much younger age how much they’re likely to get, providing a solid base for their saving and retirement planning."
For the new State Pension, you will normally need at least 10 'qualifying years' on your National Insurance record to get any State Pension. These can be from before or after 6 April 2016, and they don’t have to be 10 years in a row. Under the new State Pension, how much you get will usually be based on your own National Insurance record only.
Married person's allowance and unclaimed years
In the past, married couples would receive what many called a "married couples pension". However, this was never really a pension but an uplift, usually to a man's pension, when they were married if their wife had not built up enough National Insurance credits of her own for a full pension.
Steve Webb explained on This Is Money: "In recognition of this fact, a married woman had the option to claim a pension at 60% of the full basic state pension rate based on her husband’s record of National Insurance Contributions. This could be claimed when her husband reached state pension age. The big difference in the new system is that the ability to claim a pension based on a husband or wife’s contributions has been abolished in the vast majority of cases."
Thousands of women might be owed money in their pension pots after a mistake in the government scheme which was supposed to protect them. Money Saving Expert founder Martin Lewis has repeatedly called on women aged 41-90 with children to check if they were short-changed.
He said previously: "From 1978 to 2010 the government had a system in place to protect state pension entitlement for those people who didn't earn enough to accrue a state pension through paid work because they had taken time off work to look after their children or someone with a long-term disability. Clearly in that time period it was mainly women who were doing that. It was called Home Responsibilities Protection and it should have been awarded automatically to those claiming child benefit or who'd received income support throughout a full tax year while they were caring for someone with a long-term illness."
It is estimated around 200,000 women did not receive the credit, leaving them being paid a reduced pension. Mr Lewis explained: "Who is most likely to be affected? Women currently between the age of 41 and 90, though it's mainly women of the age of 60s and 70s. But it could be anyone 41-90 who took time away from paid work to look after a child or a person with a long-term disability at any point between 1978 and 2010 who claimed child benefit or income support for the first time before May 2000."
He advised those affected to check their State Pension forecast on Gov.uk and look for gaps in National Insurance years from 1978 to 2010, which may indicate missing Home Responsibilities Protection. "It's worth checking, it's huge money, these mainly women have been done over by a system error," he said.
