For women who divorced but did not remarry before state pension age, any substitution based on their former husband’s National Insurance records should have taken place when she claimed her state pension. However, for women who got divorced post-retirement, there is no automatic process for an uplift to take place.
The change in the pension arrangement means that there is now a single-tiered pension, and the bill was named “A simple foundation for saving”. The flat-rate pension of a maximum of £179.60 (in 2020/21) per week will replace the old three-tier system of the basic state pension, the additional state pension and graduated pension.
However, the changes will only affect retirees on or after the aforementioned date of 6 April 2016. There are winners and losers because of the changes. The self-employed are big winners whereas unfortunately, ex-spouses may be among the losers.
The main issues in respect of the changes are as follows:
- There is a minimum number of contributions. Under the old system, there was no minimum number of years to qualify for a state pension. If a woman reached retirement age after April 2016, she is now bound to the new state pension scheme, which is reliant on their having made national insurance contributions for more than 10 years. Without this, retirees are usually ineligible for the single tier pension.
- Some spouses may not qualify for a single tier pension. This would be applicable to spouses who do not have a sufficient National Insurance contribution history and whom do not reach state pension age before April 2016.
- Under the old rules, it was only necessary to pay qualified National Insurance contributions for 30 years. However, to now qualify for the full amount of the single tier pension of £179.60 per week, National Insurance contributions must be paid over a period of 35 years. The Duxbury Tables assume the full state pension is payable. If this is not the case, then there may be insufficient funds to support the required income level of that particular person. Some higher earners or older people may have had a higher expectation from the old system. These expectations of higher benefit may have to be factored into any pension report. Some spouses may only qualify for a proportionate single tier pension.
