Women lose out from national insurance

Many women are losing out on unemployment, health and sickness benefits and pensions, because they do not understand the importance of paying national insurance (NI) contributions, according to research by the Equal Opportunities Commission (EOC).

Currently NI contributions must be paid on earnings over £66 a week. This will be raised to £84 per week from April.

An EOC study of low- paid workers in the hotel and catering sector shows that part-time employees, most of whom are women, pay contributions intermittently because of the temporary nature of the work. They therefore waste money on "lost contributions", as entitlement is based on qualifying years, rather than on an assessment of contributions made over a lifetime.

Older women are likely to lose out most because of paying contributions intermittently and because of relying on their husband's pension. However many will be divorced by the time they reach retirement age.

And many younger women in the study believed it was not worthwhile paying contributions because they thought the state pension would no longer exist by the time they retired.

EOC Chair Julie Mellor said the survey was "indicative of what is

happening to low paid workers all over the country. They're robbing Peter to pay Paul, making a short-term gain because of the pressure on their household incomes, but losing out on their long-term security".

The EOC is urging the government to tell all low-paid workers that they will lose rights to benefits and pensions if they do not pay NI contributions. And in the longer term they are calling for further reforms to the NI system to give access to work-related benefits for low-paid workers.