Department for Work and Pensions
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Huge boost for women and carers as Pensions Act 2007 becomes law

Huge boost for women and carers as Pensions Act 2007 becomes law

DEPARTMENT FOR WORK AND PENSIONS News Release (PENS-034) issued by The Government News Network on 26 July 2007

Women and carers received a huge boost today thanks to the reforms to the state pension system in the Pensions Act 2007, which has received Royal Assent.

For many low income women, this could mean an extra £50 a week by the 2050s from the state pension.

Secretary of State for Work and Pensions Peter Hain said: "This Act will deliver the most important reforms to the state pension system in generations.

"Many women and carers are currently denied a full pension entitlement because their family and caring responsibilities mean they are not in work long enough to qualify.

"This Act provides women and carers with a fair deal, making it easier to balance their responsibilities and recognising their contribution to society as a whole.

"Around three quarters of women retiring in 2010 will be entitled to a full Basic State Pensions - compared with 35 per cent now, and 50 per cent without reform. More than 90 per cent of women and men retiring in 2025 will be entitled to a full Basic State Pension."

The number of years' contributions required to achieve a full Basic State Pension will be reduced to 30 for women and men from April 6, 2010. The current requirement is 39 years for women and 44 for men. The Act will gradually increase State Pension Age to 68 by 2046 for men and women.

The Act lays the foundations for the new pensions settlement being introduced by the Government. As well as providing a boost for women and carers, the Act re-links the Basic State Pension with earnings from 2012, or by the end of the next Parliament, and provides for a simpler flat rate State Second Pension.

Hailing the new pensions settlement, Peter Hain said:

"This Act lays the foundation for the new pensions settlement. By re-linking the Basic State Pension with earnings, we will ensure that living standards for older people keep pace with the rest of society. And by providing a fairer deal on state pensions, we are providing a platform for greater saving by both individuals and employers in the new savings scheme we are introducing in the next Pensions Bill. For the first time, all employees will have access to a workplace pension with a minimum employer contribution, and a contribution from the Government."

He added:

"It is a tribute to the consensus we've built that there is now widespread agreement that people will need to work longer in the future - it would be wrong to leave it to future generations to foot the bill for people living longer.

"Maintaining that consensus is essential if we are to build the highest possible public confidence in the new pensions settlement and to ensure that it lasts for the generations to come."

The announcement of Royal Assent was made this afternoon.

Notes To Editors

1. The Government's pension reforms build on the Pensions Commission's analysis. The White Paper Security in retirement: towards a new pension system, which first set out the Government's proposals for state pension reform, was published in May 2006. The Government published proposals to give all employees access to a workplace pension in its White Paper Personal accounts: a new way to save. For more information go to

2. Under the reformed system, people caring for children or people with a severe disability will be able to build up a state pension entitlement through weekly carer's credits. These credits will be more flexible than Home Responsibilities Protection (HRP), which requires people to build up a full 'qualifying year' to protect their state pension entitlement.

3. Under reform, a person reaching state pension age around 2050, who has worked or cared for over 40 years, could build up a total entitlement of around £145 per week (2007-08 earnings terms) from Basic State Pension and State Second Pension. This compares with less than £100 a week without reform.

4. The Bill will raise the State Pension age gradually to reflect increasing longevity. The first increase from 65 to 66 will take place between 2024 and 2026; the second increase from 66 to 67 will occur between 2034 and 2036; and the third increase from 67 to 68 will take place between 2044 and 2046.

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