Extra pension for stay-at-home mothers

MOTHERS WHO stay at home will qualify for extra pensions of up to pounds 50 a week under plans to be announced by the Government today.

People who look after sick or elderly relatives will also receive a second pension when they reach retirement age on top of the basic state pension, now pounds 64.70 a week for a single person and pounds 103.40 for a couple.

Four million mothers and carers will benefit from the Government's decision to pay their contributions, under proposals in a Green Paper to be unveiled by Alistair Darling, the Secretary of State for Social Security.

"These carers are doing important and worthwhile work, but it has not been reflected in their pensions in the past," a government source said last night. "There is a strong moral case for their efforts to be rewarded."

The decision to boost the pensions of women who give up work to bring up their children will be seen as a measure aimed at bolstering family life.

Church leaders have urged the Government to reward marriage through the tax system and give financial help to stay-at-home mothers, while the Tories have accused Labour of undermining the family by bringing in generous help with child care costs.

Mr Darling's so-called "carers' pension" will form part of a wider package under which the Government will help people who seek to provide a decent income for their own retirement. The Secretary of State will argue that those who can afford to save for their old age have a responsibility to do so, so the state can concentrate its resources on the genuinely poor. The Green Paper will include a mixture of incentives and penalties aimed at persuading the eight million people not saving for their retirement to take out new "stakeholder pensions".

Workers who save may be allowed to pay lower national insurance contributions, while those who do nothing when they could make provision for themselves may face lower benefits in retirement.

But the Government will stop short of the compulsory scheme proposed by Frank Field, who resigned as the Welfare Reform minister in July.

The Tories will seize on the rejection of Mr Field's ideas as evidence that Tony Blair has backed away from radical changes to the social security system, despite his pledge to switch part of the pounds 100bn-a-year budget to education.

Mr Darling said that forcing people on low incomes to save more was not feasible. "I part company with those who say `compel everyone to save'. I don't believe compulsion is the key issue. There are other ways of achieving what I want," he said. People earning less than pounds 9,000 a year would have their pension contributions subsidised by the state.

The Tories will accuse the Government of "tinkering" while the Liberal Democrats will criticise it for rejecting a compulsory system, which they say is necessary to ensure poor people receive an adequate income in retirement.