Boosting A Woman's State Pension

Women reaching state retirement age currently get a raw deal when it comes to the basic state pension. Deferring it may be an option worth considering.

I had dinner last night with a couple of female friends who will be celebrating their 60th birthdays in the next few weeks. As they are both youthful baby boomers, the word 'pensioner' doesn't really figure in their vocabulary and I expected them to regard the idea with horror. I should have known better -- they are both hilariously excited by it!One of them intends to get on a bus for the first time in 30-odd years just for the hell of it to try out her free bus pass, while the other is planning a spot of retail therapy when her basic State Pension starts being paid. Their husbands are rather envious because neither of them is old enough yet to start drawing their own State Pension.My 'bus pass friend' is one of just 30% of women entitled to the full £84.25 a week. She runs her own business and has paid her National Insurance Contributions independently of her husband for the required number of 'qualifying years' (currently 39 years for women, 44 for men) that entitles her to the full rate.She has chosen to defer her State Pension for the time being as she doesn't need the money, which means that she'll be able to claim a higher pension or a taxable lump sum payment at a later date. For every year that she defers it, her pension will increase by just over 10% - so if she doesn't claim it for five years, her weekly pension will be worth around half as much again. Alternatively, she'll be able to claim as a lump sum the amount of pension she has given up plus an interest rate of at least 2% above the Bank of England base rate.Unfortunately, my 'retail therapy friend' is only entitled to just over £50 a week because she hasn't worked for the full number of qualifying years having spent much of her adult life bringing up her children. She also has a complicated work history. In truth, she's the one who should be deferring taking her pension to ensure she gets more when she really needs it but nevertheless, she's decided to take the money and run with it now 'just in case the Government decides to stop paying it in the future'. (She doesn't trust politicians!)Whether male or female, you will usually be sent an invitation to claim your State Pension four months before you reach State Pension age - currently 60 for women and 65 for men, rising from 2010 to 65 for women by 2020 -- so if you're on the cusp of becoming a pensioner and you haven't heard from the Pension Service, get in touch with them right away.If you're nowhere near that age, it's a good idea to apply for a State Pension forecast which will tell you the current value of your State Pension and the amount you may get when you reach the relevant age. If you're not on track to qualify for the full rate, the forecast will also tell you if there is anything you can do to improve matters.Note that the new Pensions Bill currently making its way through Parliament aims to reduce the required number of qualifying years to 30 for both men and women so if it becomes law, it's estimated that 90% of women will automatically qualify for the full State Pension in their own right by 2025. Unfortunately, it also aims to raise the state retirement age in stages so by 2046, the basic pension won't be payable until you're 68.> Read our Pensions Guide> Four Ways To Save For A Retirement