Women's pensions: Why am I penalised for marrying again?

Joan Warren knows just how she could increase her retirement income. All she needs to do one week before she steps down from her job in three years' time is to divorce her husband. Then, a week after she has retired, she can marry him again.

If she took this simple step, Ms Warren would be better off to the tune of up to pounds 18 a week until she dies. The reason? She is caught in a Kafkaesque benefits trap which penalises her not for divorcing her first husband in 1985 but for marrying again a few years later.

Ms Warren, a property lawyer in Manchester, took a career break to raise her children between 1962 and 1970. During that time, the DSS accepted that her husband's National Insurance contributions could count towards her state pension. After her divorce, the same situation applied.

It was only when she remarried that she discovered her former husband's contributions would no longer count towards her pension. "This is ludicrous," she says. "I have spent the last few years writing letter after letter to sort this out. I finally asked whether if I got divorced and then remarried, my husband's contributions would apply again. They said this was correct."

Ms Warren's plight is typical of hundreds of thousands of women affected by a series of petty rules such as this one. Almost 40 per cent will retire on a income of less that pounds 40 a week, according to PensionStore, a telephone pensions company.

Among the most recent changes to hit women was the former Conservative government's decision - under the banner of sex equality - to raise the retirement age in stages from 60 to 65. Women under the age of 35 will be hardest hit by this.

Women's patterns of employment also tend to ensure they receive less at retirement. Traditionally, women have depended on men for their pensions. But new lifestyles, which include simply living together, make this a less likely option.

Career breaks to care for children or elderly relatives also hit women hardest.

Research by Colonial, the financial services provider, shows that if a woman aged 20 starts a personal pension and then takes a four-year break at 28 to start a family, she would build up a retirement fund worth a quarter less than someone who carried on working to 60. Part of the problem is that women, who are more likely to stop work at that age, are not allowed to contribute to a pension over that period. Even when they are in work, their contributions are half those of men.

For those who are employed, women are less likely to be in workplaces with occupational schemes. Their traditionally lower pay and fewer years of service mean their pensions will be lower

The Trades Union Congress campaign next week includes a freephone number for advice on any pensions issue. Unions are asking the Government for more flexibility in occupational schemes and for unearned income to be allowed as a source for pension contributions.

The TUC also wants a new state pension for women who cannot join an occupational scheme.

John Monks, the TUC general secretary, says: "With nearly 12 million people in work, and many of these entitled to some form of pension, this campaign should go some way towards enabling women to make provision for themselves."

As for Joan Warren, any changes may come too late. She says: "I feel this is very unfair. Why should I be told that the only way I can get a decent pension is to divorce my husband?"

TUC Helpline 0800 882123, 10.30am-7.30pm, Mon-Fri

DO'S AND DON'TS

Do:

Ask the Pensions Office to tell you how much state pension you will receive. The address is available from any DSS office.

Join your occupational pension scheme if you are entitled.

Inquire about the possibility of "buying" extra years of pension entitlements. Or pay into a company pension top-up scheme, called Additional Voluntary Contributions (AVCs).

Start a personal pension if you cannot join the company scheme.

Don't:

Assume the state pension is enough. It is too low now and will be worth less when you retire.

Assume you can live off your husband. You may well have dumped him (or vice versa) by the time you are retired.