Nearly 300,000 people are due to receive lower pensions in a move announced in December last year. The government plans to scrap the ‘derived benefit’ top-up for spouses worth up to around £66 per week, a benefit that disproportionately benefits women.
It’s the latest in a salvo of policies designed to reduce pensions spending at a time when every pound has to stretch further.
Derived benefit explained
The top-up is awarded to people who have failed to accrue the required 18 years of National Insurance contributions required to receive the state pension, but whose spouses have met the requirement. Approximately 3% of all pensioners receive the derived benefit top-up.
It was introduced in the National Insurance Act of 1946, under the dominant societal model of the male breadwinner. Women were extremely likely to reach state pension age without qualifying for their own pension, and so were awarded up to 60% of the full pension while their husband was alive, increasing to the full rate once widowed. Continue reading