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Reduced Rate National Insurance for Married Women
The reduced rate National Insurance scheme for married women closed to new applicants in April 1977, but a small number of women who opted in before that date continue to pay lower contributions today. While this saves money in the short term, it significantly reduces your State Pension and access...
The reduced rate National Insurance scheme for married women closed to new applicants in April 1977, but a small number of women who opted in before that date continue to pay lower contributions today. While this saves money in the short term, it significantly reduces your State Pension and access to certain benefits, so it's important to understand what you're giving up.
What is the reduced rate?
The reduced rate National Insurance (sometimes called the 'small stamp') was a scheme that allowed married women to pay lower National Insurance contributions in exchange for reduced benefits and pension entitlement.
The scheme closed to new applicants in April 1977, meaning you can only still be paying the reduced rate if you opted in before that date and have not opted out since.
How much do you pay?
If you're employed and paying the reduced rate, you currently pay 1.85% of your weekly earnings between £242 and £967 (for 2024/25). This replaces the standard rate of National Insurance that other employees pay on their earnings.
If you're self-employed and opted into the scheme before it ended, you do not pay Class 2 National Insurance contributions and they are not treated as having been paid.
How the reduced rate affects your State Pension and benefits
Paying the reduced rate has significant consequences for your retirement income and benefit entitlement.
Your State Pension will be lower
The most important impact is on your State Pension. Because you're paying less into the system, you'll receive a reduced State Pension when you retire.
You should get a State Pension statement to see an estimate of what you'll receive at State Pension age, and check your National Insurance record for gaps. You may be able to increase your State Pension through your spouse's contributions.
Benefits you cannot usually claim
You will not usually be entitled to benefits that are based on your National Insurance contributions.
You will not be entitled to Home Responsibilities Protection (a scheme that protected your State Pension if you took time off work to care for children or disabled people).
You will not usually get National Insurance credits, except in specific circumstances:
- If you're a widow
- If you get Child Benefit for a child under 12 and you claimed after 6 April 2010
- If you're looking after someone who's sick or disabled
Benefits you can still claim
Despite the restrictions, you may still be able to claim:
- Benefits based on your husband's contributions, such as Bereavement Allowance
- Statutory payments, such as Statutory Sick Pay
- Benefits that are not based on National Insurance contributions, such as Carer's Allowance
Should you stop paying the reduced rate?
This is an important decision that depends on your individual circumstances. Once you give up your right to pay the reduced rate, you cannot claim it again.
Stopping the reduced rate means:
- You'll pay the standard National Insurance rate going forward
- You'll start building up full entitlement to State Pension and benefits
- Your future State Pension will be higher
To stop paying the reduced rate, you need to fill in form CF9 (or form CF9A if you're a widow) and send it to HMRC at:
National Insurance contributions and Employers Office
HM Revenue and Customs
BX9 1AN
When you automatically lose the right to the reduced rate
Your right to pay the reduced rate ends automatically if:
- You get divorced
- You have not earned over the Lower Earnings Limit (currently £123 a week) or been self-employed for 2 tax years in a row
If your husband dies, you may be able to keep your right for a certain period. Contact HMRC for information about your specific situation.
What to do if you lose the right
You must tell your employer or HMRC if you lose the right to pay the reduced rate. If you don't, you might owe HMRC unpaid National Insurance.
If you're employed, tell your employer. They'll complete part 2 of your 'certificate of election' and return it to you. You then complete part 1 and send it to HMRC.
If you're self-employed, register to pay Class 2 National Insurance immediately, complete part 1 of your certificate of election, and send it to:
PT Operations North East England
HM Revenue and Customs
BX9 1AN
If you want to start paying the reduced rate again
You can only start paying the reduced rate if you were already opted into the scheme before it closed in 1977.
If you're eligible and want to claim the reduced rate, give your 'certificate of election' (form CA4139, CF383 or CF380A) to your employer.
If you opted in but no longer have your certificate, you can apply for a new one by sending form CF9 (if married) or form CF9A (if widowed) to the PT Operations North East England address above.
Sources
This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.
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