Briefing Notes

Briefing Note 47 - Extending the right to buy back National Insurance Contributions

State Pension (BSP) will be reduced from 39 years for women and 44 years for men to a total of 30 years for both. This sudden drop off in qualifying years, known as the ‘cliffedge’, has been perceived by some stakeholders as unfair, especially to women, and has prompted an amendment to be tabled to the Pensions Bill 2007/08 that would extend individuals rights to buy back missed years of NICs.

This Briefing Note explores the potential advantages, disadvantages and costs of implementing the amendment in an attempt to clarify the issues involved.The note highlights the trade-off that the Government faces, between, on the one hand, helping more women on low incomes to receive a full BSP and, on the other hand, incurring costs to the exchequer, possibly without being able to target the benefit at women on low incomes.