Will new S Pension cause resentment?

seven-day-weekend wrote: »

am I correct in thinking that anyone retiring under the new rules will get their Occ Pension docked off the £155 - so that theoretically they could get £0 SRP? Please tell me I am wrong!

Straight_Shooter wrote: »

Ok I'm confused now, I had researched my position and read that those currently in their 50's & 60's who have paid higher levels of NI and therefore qualified for additional state pensinon would be able to keep their entitlement under the rules of 'protected payments' :huh:

bowlhead99 wrote: »

It is true, the extra pension you have from paying higher levels of NI (the serps/s2p type stuff) may give you a higher "starting amount" versus the new method at April of this year, and if it does, you can keep the high starting amount.

However, my situation which will not be uncommon is that I've paid higher levels of NI, nd under the old system those higher levels of NI *would* have helped me get to well over £155 assuming I carried on working and carried on paying into the system. However, I'm a long way from my 50s or 60s and haven't exceeded the magic £155ish figure yet. I'm only around low 120s based on a forecast a while back that didn't include 2015/6.

So when I get my "starting amount"which is the higher of old system and new system it gives me low 120s. Then in a few years of paying NI going forward from now, (accruing 1/35th of 155 for each year worked), I will be in my mid to late 40s and have already got to the £155 maximum and then it will stop accruing, even though I have another 20 years of paying NI on a hopefully high salary, to go before I reach state retirement age.

If I was older and my "higher of new system and old system" had already got to £200+, they wouldn't take that away from me and I could keep it. But instead, I was perhaps "well on course" to get that level but now I'm not allowed, I can only accrue flat rate - with no premium for high NI payments - until I hit the limiter and then I stop.

I even have a couple of missed years from when I was out of the country working overseas, but it's not worth bothering filling out any paperwork to try to claim the missed years under a reciprocal arrangement, or paying out any cash to simply "buy them back", as I have no need for them, as I'll already be at £155 with 20 years to go.

In terms of what that "costs" me: under the old system I could have had £50-100 extra per week for the same lifetime contributions. £50-100 per week from retirement age 67 to 97 is in the order of £78-155k. Ow.

By contrast, there are some people who have been contracted out, paying lower NI contributions all their lives while their excess NI money was buying them a sweet personal or employer pension on the side. They might be at around £110 a week now under the "best of both methods" rules, and their NI over the next decade is allowed to accrue them 1/35th of £155 each working year, even on a relatively low salary, until they max out at the £155 level like me. But they have an entirely separate pension pot on the side that was funded by contracting out and paying discounted NI rates.

So, clearly there are winners and losers under the new transitional arrangements as we move to a new system that is worse for high earners and better for low earners and various special interest groups, but overall apparently broadly cost-neutral for the country.

seven-day-weekend wrote: »

That is so unfair, imho.:mad::mad:

I can now confirm i will receive my £155.65 (or equivalent) per week and no more, despite paying higher levels of NI for most of my working life. What a waste of money, from my perspective, (although I've supported the country, as a whole.) What a shame i wasn't born just a few years earlier. But as it's been said, there will always be winners and losers.

I've worked and contributed for 45 years

I didn't contract out of SERPS (or second state pension)