We don't normally comment on the area of pensions, but there is a change afoot that could affect the long term finances of a number of people in the UK. It is an unfortunate fact that amendments in taxation, benefits and other government controlled changes to our income levels always have to have a cut-off point. This is the date from which new legislation will apply, so that (in the case of benefits) if you are just 1 day beyond the date specified (usually determined by your date of birth) you will gain from the change. If the anniversary of your date of birth is even a few hours before the cut off point, then you will not qualify for the increase. This ruling applies to the forthcoming pension changes, and is especially unfortunate for women.

The date in question is 6th April 2010, on which date the number of years of employment needed to qualify for the full basic state pension will reduce from 39 years to just 30 years. This will be of no help to those who have retired by then but have failed to amass the necessary 39 years of full National Insurance contributions - this could amount to 70% of female retirees. This means that a woman retiring at age 60 on 5th April 2010 after 30 years of paying a full N.I. contribution would get a pension of £67.23 per week, whereas a woman retiring at age 60 on 6th April 2010 also with 30 qualifying years, would get the full basic state pension of (currently) £90.70 per week. The problem is further exacerbated by the existing provision which allows for the purchase of up to 6 years of missed N.I. contributions, but never more than 6 years.

Baroness Hollis is trying to get an amendment to the Pensions Bill through parliament which would enable those with at least 20 years of qualifying contributions to purchase up to 9 years additional contributions, to enable them to achieve the full weekly pension payment. Despite the government's view that amending the bill as originally proposed would be too expensive, it has be remembered that, for the individuals involved, buying back 'lost' years is not a cheap option. The purchase cost for the current tax year alone is said to amount to £421.20.