Government to give pensions credits for unpaid social care

People who cannot work because of  their caring commitments will be given extra pensions credits to help them save for retirement, under government plans.

Work and pensions secretary, John Hutton, said the pensions White Paper – expected next week – will include a credit scheme which would put unpaid social work, such as caring for children or elderly relatives, on the same level in terms of pensions entitlement as financial work.

Hutton said the plans would ensure “that we value social contributions equally with cash contributions”.

He rejected plans by the Pensions Commission to base the scheme on a residency qualification of 30 years for the entitlement, saying this would take too long to help many women.

People who look after someone for 20 hours a week or more will be able to build up their entitlement to the state pension, which will be calculated weekly to enable more people to qualify.

Women are the hardest hit by caring responsibilities – it is estimated about 85% of men but only 30% of women retire on a full basic state pension.

Hutton said the new plans would mean more than 90% of women would retire on a full pension by 2025.

“At the heart of next week’s reforms will be a new contributory principle that gives women a fairer entitlement to the basic state pension more quickly – while ensuring that we value social contributions equally with cash contributions and move progressively away from a system predicated on a 19th century view of both working lives and social relationships,” Hutton said last night.

Hutton said the White Paper would remain “basically true to Lord Turner’s blueprint”.

Turner remains steadfast on pension plans

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