Until 1977 married women and widows could 'elect' (choose) to pay a reduced rate of Class 1 National Insurance contributions when an employee, and not to pay Class 2 National Insurance contributions when self-employed.
This guide looks at the effect of that choice on state benefits and gives you points to consider if you're thinking of cancelling your election.
On this page:
Married woman's and widow's reduced rate Class 1 National Insurance contributions don't count towards 'contributory benefits' like the basic State Pension and bereavement benefits. So if you've chosen to pay these (when an employee) or not to pay Class 2 contributions (when self-employed) you won't normally be able to claim benefits based on your own contributions record. However, you may still be able to get some benefits based on your husband's (or your late husband's) contributions.
You may be able to get:
Reduced rate National Insurance contributions don't count towards:
National Insurance and state benefits
If you're a married woman (but not a widow) who has chosen to pay reduced rate contributions, you won't normally be entitled to National Insurance credits for any week covered by your 'Married Woman's Reduced Rate Election'. However there are exceptions, for example if you've been wrongly imprisoned or you are caring for a child or someone who is sick or disabled. Find out more about National Insurance credits by following the first link below.
Up to 5 April 2010, some people who were caring for others qualified for Home Responsibilities Protection. However, you were not entitled to Home Responsibilities Protection for any year where you had a reduced rate election in effect at the start of that year. Find out more about Home Responsibilities Protection by following the second link below.
More about Home Responsibilities Protection on GOV.UK (Opens new window)
You can cancel your election at any time. If you do, you'll have to:
It may be worth your while cancelling your election because you might:
Find out about topping up your National Insurance contributions
If you earn between £109 and £149 a week (2013-14 tax year) you don't pay - but are 'treated as having paid' - Class 1 contributions. Cancelling your election will cost you nothing in terms of additional contributions but will help you build up entitlement to benefits such as the basic State Pension.
Example - Marie earns £120 a week and has an election in place. She doesn't pay any reduced rate Class 1 contributions on that amount, but is treated as paying reduced rate contributions. These contributions don't count towards contributory benefits.
If she cancels her election, she won't have to pay any full-rate contributions on her earnings but will be treated as paying full-rate contributions. These contributions will however count towards contributory benefits.
If you earn between £149 and £797 a week, you pay full-rate Class 1 contributions of 12 per cent on earnings between these amounts, rather than reduced rate contributions of 5.85 per cent.
You also pay an extra 2 per cent on all your earnings over £797 whether or not you have an election in place.
Example - Sarah earns £350 a week and has an election in place. She pays reduced rate Class 1 contributions of £11.76 (£350 - £149 x 5.85%). Her contributions don't count towards contributory benefits.
If she cancels her election, she'll pay full-rate contributions of £24.12 (£350 - £149 x 12%) - that's £12.36 a week more in contributions but these will count towards contributory benefits.
Unless you apply for, and are granted, a 'small earnings exception' you will have to pay Class 2 contributions - follow the link below for more information. The weekly rate for the 2013-14 tax year is £2.70.
Tax and National Insurance for the self-employed
There are some things to consider before you decide, including:
Find out about qualifying for the State Pension and changes from April 2010 (Opens new window)
HM Revenue & Customs (HMRC) recommends you get a State Pension statement from the Department for Work and Pensions to help you decide whether to cancel your election.
The statement will tell you how much basic State Pension you may get based on your current National Insurance contributions record.
The statement will tell you how much basic State Pension you may get based on your current National Insurance contributions record.
Get a State Pension statement (Opens new window)
If you want to cancel your election you'll need to fill in:
Or you can call the National Insurance Enquiries for Individuals Helpline on Tel 0845 302 1479. The helpline is open from 8.00 am to 5.00 pm, Monday to Friday except bank holidays.
Send your form to HMRC at:
National Insurance Contributions & Employer Office
Benton Park View
Newcastle upon Tyne
NE98 1ZZ
You can start paying full-rate Class 1 contributions or Class 2 contributions from the beginning of the week following the one in which you tell HMRC that you want to cancel your election - or from the beginning of any later week in the same tax year.
Remember that once you cancel your election you can't change back - unless you tell HMRC before the date the cancellation comes into effect.
Married women, widows and reduced National Insurance
Tax and National Insurance for the employed
Tax and National Insurance for the self-employed
