I was advised by the Department for Work and Pensions after having my children and returning to work to pay half stamp.

They said it meant I would not be able to claim sick pay or unemployment. There was no mention of the state pension.

I returned to full-time working, I was never unemployed and not often sick. I progressed to a good salary and paid a percentage to the taxman and a percentage to National Insurance, which was higher than other women paying full stamp.

When I retired and received a smaller pension than the women who paid less than me, I called the DWP and asked how that could be.

They told me they had sent me a letter saying I was given the chance to pay them 'X' amount and that when I retired I would get full pension.

I never received any such letters. They said they sent it and I ignored it. I have over time spoken to other women regarding this letter and they have said they never received any correspondence, and were told the same as me by the DWP.

I was 80 this week and received an increase in my state pension of 25p. They really do know how to humiliate the senior working women in this country. Could you please look into this for me?

Ask Steve Webb your question. Email [email protected] 

Steve Webb replies: Your experiences are unfortunately very familiar. 

Millions of married women opted to pay a reduced rate of National Insurance Contributions back in the 1960s and 1970s, only to find – decades later – that they have little or no state pension entitlement.

When the National Insurance system was set up in the 1940s, the assumption was that in most couples it would be the man who went out to work and that he would support his family from his wage.

On this assumption, women would be financially dependent on their husbands not only when of working age but also in retirement.

In particular, a woman who spent her life mainly in unpaid work, including bringing up children, would be able to claim a 60 per cent ‘married woman’s pension’ when her husband retired and based on her husband’s contributions.

The question then arose as to what should be the National Insurance treatment of married women who did go out to work.

It was decided that such women would have two options:

- They could work and pay full rate NI, building up a full pension in their own right; OR

- They could pay a ‘reduced stamp’ which would save them money whilst working but mean they built up no pension in their own right for those years.

There’s no doubt that the way this option was presented to married women would not pass today’s standards for communications.

I have heard of many cases where newly married women – often in their late teens or early twenties – were told on their return to work after getting married that they should simply sign a form to qualify for reduced NI contributions.

For some women, and perhaps particularly those who were planning to have a family and expected a limited working life, this may have been entirely the right thing to do financially.

But for others, such as yourself, it meant that even though they may have gone on to work and contribute for many decades, they were building up no state pension.

I note your comment about letters encouraging people to top up their state pension through voluntary contributions.

This would have been possible if you had actual ‘gaps’ in your record when you were not working and paying NI at all.

But if you were working and paying a reduced stamp it wasn’t possible to pay voluntary contributions for such years, and this may be why you never received a letter about top-ups.

The idea of having a reduced contribution rate for married women seems very old-fashioned now, and the ability to opt for this reduced rate ended in 1978.

But women – such as yourself - who had opted for the reduced rate prior to 1978 were able to carry on paying at a lower rate provided that their career was largely uninterrupted thereafter.

When challenged about this, successive Governments have made three main points:

- Women who paid the reduced rate did save money compared with the amount they would have paid at the full rate;

- Even though these women may have built up little state pension, they did qualify for 60 per cent of the basic state pension (this works out at £105.70 a week at present) once their husband retired despite paying reduced contributions;

- The form which was signed to opt for the reduced rate did say that this would affect future entitlement to pensions and benefits.

On this last point, it is pretty clear – as you indicate – that many women were simply not aware of the long-term implications of paying the reduced rate when they opted to do so, often at a young age.

Unfortunately, at this stage, it is hard to see what can be done about all of this. Simply upgrading the state pensions of those who paid the reduced rate would create a sense of unfairness amongst a different group – those who built up a larger state pension by opting to pay full rate contributions.

It is to be hoped that if anything like this was ever offered again, it would be communicated much better so that people understood the full implications of the choice that they made.

But, as things stand, many women in retirement in the 2020s are losing out from a system that was designed in the 1940s for a very different world.

Finally, regarding the 25p a week you have received for turning 80, this is obviously a nonsense.

Like other elements of the system such as the £10 Christmas Bonus, it was introduced back in the 1970s and has never been increased since.

The new state pension system no longer has this rather absurd addition for turning 80, but those who retired before April 2016 still qualify when they turn 80.

There wouldn’t be any appetite in Government to increase the figure to a more meaningful amount, especially with growing numbers of people reaching 80, and as it is already ‘hard-wired’ into the system, it would probably be more trouble than it is worth to abolish it.