Q: What is going to change?

A: People who take time off work to care for children or relatives who have not paid enough National Insurance Contributions (Nics) to qualify for a full state pension will be allowed to make extra payments later in life to fill the gap.

They are already able to buy back up to six years of missed Nics but a Pensions Bill amendment will allow people to buy another six years with a one-off payment, doubling the present level.

Q: Who will benefit?

A: The proposals will apply to those who reach State Pension age between 6 April 2008 and 5 April 2015 and who already have 20 qualifying years on their National Insurance record.

The Government estimates that up to 555,000 people could benefit from the policy change, mainly women. At present, 90 per cent of men but just 35 per cent of women qualify for a full state pension.

Ministers say that by 2010 about 75 per cent of women reaching state pension age will be entitled to a full basic state pension, and by 2025 that would rise to 90 per cent.

Q: How much do I need for a full state pension?

A: At present, women need 39 qualifying years when they are working and paying Nics to get a full pension of £90.70 a week. Men need 44 years.

If you are caring for children under 16 or a sick or disabled person you qualify for home responsibilities protection (HRP). This cuts the number of qualifying years you need, but you still have to work for 20 years and pay Nics to get the full basic state pension.

From April 2010, the qualifying period for a full pension will be cut to 30 years for both men and women. HRP will be replaced by a system of credits for parents and carers which will count towards your state pension entitlement. A person will be able to build up entitlement to a basic state pension on the carer's credit alone.

Years of HRP built up before 6 April 2010 will count as qualifying years of National Insurance credits.

Q: What is a qualifying year?

A: A year in which you have earned enough to make Nics. In the 2008-09 tax year, you need to have earned £4,680 or more if you are an employee or £4,825 or more if you are self-employed.

Q: How do I know whether I need to make up for lost time?

A: You need to add up how many years you have worked and paid national insurance, and how many more payments you will make before you reach the state pension age. You can get a pension forecast from the pension service (0845 300 0168).

Q: What is the state pension age?

A:The state pension age is 65 for men and 60 for women who were born on or before April 5 1950. Between 2010 and 2020 the retirement age for women will increase to 65 too. It will then rise to 66 for both sexes from 2024, 67 from 2034 and 68 from 2044.

Q: How much will it cost to make up for lost time?

A: If you have a broken contribution record you pay voluntary, or Class 3, Nics to make up for the years you have missed. This year it costs £8.10 a week or £421.20 a year to buy a year's entitlement. The rate normally rises in line with inflation each year, but ministers have indicated that future increases may be higher than this to offset the cost of the change.

Q: Is it worth it?

A: For many people yes but Ros Altmann, spokeswoman of the Pensions Action Group, warns that women should take advice before committing money. A sizeable proportion of those on low and middle incomes will anyway be entitled to £130 a week in state pension under the pension credit.

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