News

1st March 2004

Full pensions planned for mums

Mothers who take time away from work to bring up children will be able to claim full state pensions when they retire, under new proposals by the Government.

Currently, millions of women have to take a reduced pension because they do not pay enough National Insurance during the years spent raising their family. The proposals are supported by many leading female MPs, including Harriet Harman, the Solicitor General, and Trade and Industry Secretary Patricia Hewitt.

Ms Harman said the Labour Party could lose women's votes unless they addressed relevant issues such as pensions.

"Women are not choosing either to be career women or to be housewives. They are trying to combine both. It is no good saying we really value caring work if you then clobber women in retirement."

Ms Harman will outline the scheme at this week's Labour Women's Conference. They have yet to decide how long each woman could take off to raise children but it is expected to be several years. The top-ups to their pensions would come from public funds.

Also supporting the plans are Ruth Kelly, the financial secretary to the Treasury, and Margaret Hodge, the children's minister.

Currently, the lower limit for NI contributions is £77 per week. It's estimated that 1.4million women are being penalised because they do not earn this amount and so do not pay national Insurance, which will reflect in their pensions at retirement.

• So what do you think of the new proposals? Air your views on our Your Shout forum.
• Want to save money? Check out shopping for Baby on a Budget.
• Get advice, help and tips for Returning to Work after having a baby.