Millions of married women are facing retirement without the state pension or other key benefits, according to the Liberal Democrats.

"When this happens in the private sector companies are forced to pay out compensation,"

Steven Webb Lib Dems

They say the problem affects up to 4.5 million women who have paid 'reduced rate' National Insurance (NI) contributions.

And they are calling on the government to act urgently to help the women to secure a reasonable pension.

When National Insurance was introduced in 1948 married women were allowed to pay a reduced rate.

Although reduced rate contributions were abolished for women who first started contributing after April 1977, those who began contributing before that date were allowed to continue paying a reduced rate.

Now many women paying the reduced rate are approaching retirement.

Mis-selling

Reduced rate payers lose entitlement to the state pension, jobseeker's allowance and sickness benefit.

"We see cases of women paying pension contributions for over thirty years but receiving nothing in return." said Steven Webb, Liberal Democrat Shadow Work and Pensions Secretary.

He said that women on reduced rates had contributed �8bn ($12.5bn) into National Insurance coffers for which their only entitlements were industrial injuries benefit and maternity allowance.

7p pension

Mr Webb said this was the government equivalent of pension 'mis-selling', particularly as many women were not aware of what benefits they would miss when they chose the reduced rate.

"When this happens in the private sector companies are forced to pay out compensation," added Mr Webb.

In one case highlighted by the Lib Dems, a reduced rate payer found that after 33 years of working for the NHS her contributions secured a state pension of just 7 pence a week.

Mr Webb called for urgent action in response to the pension crisis.

He said women on reduced rates should be informed of the shortfall and offered the chance to buy back missing years of their contribution record in order to secure a pension.