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Fairer pension calculations for part-timers: How it works
08 July 2019 @ 13:24

A WELCOME change in the pension contribution system means part-time workers will no longer have to spend longer in employment to qualify for an earnings-based retirement fund – a move that is expected to affect around 1.6 million people who, at present, are not in full-time jobs.

Full details will be released on Wednesday this week in the daily State Official Bulletin (BOE), a hefty publication containing government announcements, but the basic outline of the reform has been explained in national media pending the finer points.


How were part-timers affected until now?

Salaries are, of course, lower for those who work fewer hours, meaning a correspondingly lower pension, and this will not change. To obtain a State pension at all, a worker needs to be paying 'into the system' for 15 years, but this is based upon a full-time, 40-hour-a-week job. Those working fewer hours would have to cram in more years – for example, an employee working 20 hours a week would need to be paying a stamp for 30 years to get a pension.

This changed in 2014, meaning 15 years was the minimum required however many hours were worked.

To get a full pension based upon earnings, as at 2018, a worker has to pay 'into the system' for 36 years and six months and would retire at age 65 years and six months, whichever came later.

A part-timer or full-timer who had worked for 15 years would be treated the same way in pension terms from 2014 until now, meaning once they passed this 15-year deadline, their earnings would be taken into account in calculating their pensions – but for part-timers, this continued to be on a pro-rata basis linked to their hours.



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