Pensions Bill

moved Amendment No. 2: 2: Clause 1, page 2, line 36, at end insert— ““( ) With effect from the commencement of this section or 1st November 2007, whichever shall be earlier, the contributor may at any time up to state pension age, make voluntary (Class 3) contributions for any period of his or her working life, in respect of up to 9 years, whether consecutive or not, which for any reason shall not have satisfied the conditions for a Qualifying Year or Years, so that such year or years shall then be deemed to be a Qualifying Year or Years.”””” The noble Baroness said: My Lords, I did not move Amendment No. 1 because Amendment No. 2 would overtake it. At the moment, more than 90 per cent of men, but only about 25 per cent of women, retire with a full basic state pension in their own right. That is because, for all their working lives, most men are in full-time waged work that carries pension rights, whereas most women are not. Women will have children, they will care for an elderly parent and they will care for grandchildren. Even when they are in work, they cannot always find a convenient job that allows them to juggle their lives, but instead make do with a couple of part-time jobs. None of that gives them a stamp. That is why, over the years, Governments of all parties have recognised the need to stretch the system with HRP for mothers and credits for disabled people and those caring for more than 35 hours a week. I am delighted that, in the Bill, the Government are helping carers and reducing the number of contributory years to 30 for men and women alike, and I hope that the proportion of women retiring on a full state pension will rise during the next couple of decades to 90 per cent. That is very good news, but it still leaves out thousands of women, especially in the next few years. Who are they? Anyone who approaches retirement in the next decade who has been caring for 30 hours a week or more for elderly parents will have no pension rights for that. Anyone who now or in future has two part-time jobs cannot add them together to get a pension. Anyone who now or in future is a grandparent who takes on childcare cannot get a stamp. In other words, there are and will continue to be groups of women who are living valuable lives of care and support who will be outside the pension system and will risk retiring into poverty. Can we help them? Yes, I think so, quite straightforwardly. Currently, you can buy missing years—any number of them—if you do so within six years of missing them. You can buy 40 of them if you want, on a rolling basis. Students buy them. People working abroad buy them. About 250,000 people a year buy them—the better educated and probably the better-off. That is because they know that with a full working life they will want a full pension record. Even if poorer women were savvy enough to know that, even if as unpaid grandparents they could raise the £350 a year for the stamp, they still would not know until the day that they retired whether they would really have needed the extra years. Their lives, unlike men’s, are full of uncertainty. If they buy the extra years at the time, they may have wasted their money but, if they do not, they may have lost their pension rights. How can they tell what the future may hold and therefore what they should do? If their daughter moves away, the need for childcare may disappear. The elderly parents whom they are looking after at home may move into residential care. A part-time job may open up to being a full-time job. A woman may not know what she needs to do to make good her pension shortfall until she is already past the six-year deadline, by which time it is too late. The amendment would allow such a woman to buy up to nine added years when she retires and when she knows what she needs. Even if she had to borrow the money to do so, the increase in her pension would more than cover it because, at retirement, she can afford it. The amendment is very simple; the nine missing years can be bought at any time, and not only within the six-year deadline. It is also entirely practical; the system is already in place for 250,000 people a year who do buy those extra years, and perhaps another 20,000 or 40,000 women may join the system. It is a fair amendment; after all, a woman could have bought those missing years at the time if she had known that she would need them. There are no freebies or handouts; she still pays for those missing years, either at the time, or at the right price, according to the RPI, 10 years down the road. What difference does it make to anyone, provided that the price is adjusted when she buys them, except to her? The amendment is also very flexible. All sorts of people in the future will fall out of the pension system for a few years. We can either tinker with the system by tailoring it to the individual, which is complicated, or do as the amendment suggests and allow people to make good any deficiency at the end of their working life when they know what they need. It is especially fair for women, who will face a cliff edge: in March 2010, women who are 60 will need 39 years of contributions but, a month later, they will need only 30 years. The unfairness of that may be rather like the reduced married women’s stamp; it will rankle. Allowing women to buy nine more years if they choose to do so would bridge that gap. Above all, the amendment, which would get rid of that six-year bar, would allow women, and men, to buy back their missing years and retire with a full basic state pension if they so wished. Many women will have had difficult lives. It would tackle their poverty and encourage them to save, and it might reduce means-testing. It is the right and decent thing to do and I hope that the House will support it. I beg to move.