I have been doing some reading in an old textbook published in 1950 for the benefit of actuarial students sitting the exam subject, Social Insurance in Britain.

 

The original old age pension was non-contributory and was paid to men and women from age 70 on a means tested basis. By 1925 it was 10/-.

 

It was paid entirely from taxpayer funds.

 

When the contributory scheme was introduced in 1925 it covered all manual workers and clerical workers with low salaries. The contributions were calculated to cover the years from age 65 to 70, when the old scheme would take over. It was to be assumed that anyone who qualified for the pension at age 65 would satisfy the means test at age 70.

 

Provision was made for increases in contribution rates at 10-year intervals. Of course these were not made in 1945 or 1955!

 

The pension was still 10/- and was paid to all contributors and to wives of men who qualified. So the wife actually got her pension at age 65 on the back of the husband's pension, but of course from 70 it was payable to all women anyway as it had always been, subject of course to the means test.

 

The pension remained at 10/- until 1946, when it was increased to 26/-. However, the increased pension for wives of pensioners was only 16/-. This was less than women who had contributed to the 1925 scheme would get, which was 26/-.

 

This is, if you like, the first appearance of category B pension. But in fact women had always had the 10/- means tested pension from age 70, and had it from age 65 if their husband had earned a contributory pension.

 

This "category B" pension was a little more than 60% of the basic rate. The rates now paid are just a tad lower than 60%.

When Webb first announced the abolition of the category B pension, he tried to give the impression that the only women who would suffer were non-British women living in overseas countries, women who had never lived in Britain and never paid "taxes". This was a blatant attempt to capitalise on the attitude of British voters to immigrants. He later corrected this, by making it clear the new rules would apply to all wives, even British-born wives living in Britain with British-born husbands.

By the way, the new rules will not deprive you of your existing category B pension.

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