Minister for Pensions Steve Webb has defended the government’s decision to remove the system whereby people living overseas can claim a state pension on the employment record and National Insurance (NI) contributions of their spouse.

The current pension system allows spouses who have not made national insurance contributions to claim the married persons allowance, if an individual does not qualify for their own. However, Webb speaking on BBC Radio 4 stated that from 6 April 2016 this will change and state pension entitlements will depend on an individual’s contribution only. Webb emphasised that there are people living abroad who have never paid into the British state pension system, but were still claiming these entitlements from a spouse with a British state pension. He stated that this was “unfair”.

“What is happening in the UK is that the number of women claiming a pension based on their husband’s record has been falling steadily as you would expect as more women work and we protect women’s pension records better. The number overseas is actually going up so we have this rather odd situation where more and more people are claiming their pensions based on a spouse’s record, when they have never put anything into the system in the UK. It is not about their nationality it is about whether they have out money into the British system.

“We pay over 200,000 pensions outside the UK and more than half of them are to people who have never put penny into the British system.

Barnett Waddingham pension consultant Malcolm McLean said: “Transitional regulations will apply to enable those reaching state pension age after April 2016 to use their (former) spouse’s NI record up to the start date of the single tier to enable them if necessary to claim up to 60 per cent of what would have been the spouse’s rate of pension. A further concession will be made to those married women who had retained the right after 1977 to pay a special reduced rate of NI, known as 'the married woman’s stamp'."

McLean stated that the change is “only likely to produce relatively little in cost saving terms and the factors which have influenced it probably owe more to political expediency rather than anything else”.

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