Purnell U-turn on pension top-ups expected

Around 550,000 women will be allowed to top up their missed national insurance payments through a one-off payment under plans due to be announced later.

Work and pensions secretary James Purnell is expected to concede an amendment to the pensions bill which would end government opposition to the move later today.

He told the Daily Mail newspaper: "The Pensions Act will transform pension provision and finally bring equality for women and carers so that by 2010 around 75 per cent of women reaching state pension age will be entitled to a full basic state pension, rising to 90 per cent by 2025 compared to around 35 per cent today."

At present many women reach retirement age without qualifying for the full state pension because they have missed national insurance contributions at some stage of their adult life.

At present only an additional three years of contributions can be bought, but this is now set to double as Baroness Hollis welcomes the move.

"I have had dozens and dozens of letters from women who are deeply distressed that because they did what most people would think was the right thing to do - look after their families or an elderly relative - they lose out in retirement," she told the Mail.

"The next stage is to tell women heading for retirement that this is absolutely worth doing. Even if they were to take out a commercial loan at retirement to make up five or six missing years, they would still be better off."