Pension Boosting article discussion

rpc

kidmugsy wrote: »

Do you really expect to benefit from it twice?

So far as I can tell, the answer to this is "yes" in a lot of cases.

Contracting-out is weakly understood at best and the distinction between not earning extra state pension (old scheme) and having your state pension cut (new scheme) escapes people.

mlv-1967

Funny how the final salaried public sector workers about to retire feel this sense of 'entitlement' to the full state pension when they are benefitting from the largesse of past governments! They should consider themselves lucky that they will enjoy such a generous employer pension.

peterbadger

The bulk of my state pension years so far were contracted out, but I have paid for some missing years by making class 3 payments . I have 30 years including the voluntary class three payments I have made.
How will the calculation be done? Is it worth buying more years to make my total number of years up to 35 when I am able to do so? Will the voluntary class three years I have paid for be calculated at the new state pension rate?

jamesd

It is not worthwhile for you to buy more years until after the flat rate starts. This is because the current rules calculation already gives you the maximum possible basic state pension and more years will not increase that. Your additional state pension is probably close to nil due to all of the contracting out. Once the flat rate comes in your pension entitlement will increase by 1/35th of the flat rate per year worked or bought until you reach the flat rate level.

There is not a 35 year cap, the real cap is the flat rate and however many years it takes to get there. For those who work only in the flat rate system it'll take 35 years but during the transition period it can take more than 35 years, or less, depending on whether there was any contracting out.

DevonWolf

Contracting out has nothing to do with the level of the basic state pension amount. So everyone should get the same.
However, if you retire before 04/2016 you will get less. Why? Cost cutting exercise.

If you were not 'contracted-out' you will get the second state pension on top of the basic state pension up to the new maximum the Govt. decides.

If you were contracted-out you will not get the second state pension but will still receive your company/private pension.

A more important question is why the basic state pension is taxable. There are many cross-party financial experts/reports that support the opinion that if the basic state pension was not taxable then this would lead to a fairer society.

JamesHoward

I am trying to work out whether it is worthwhile buying the £25 a week top up to State Pension scheme just available from 12th October. I have read on the Govt. website & also on Martin's guide that in the event of my death my wife can inherit 50% to 100% of this.
I cannot find from the Govt. phone enquiry lines how to discover whether it would be 50% or 100%, & Martin's Guide states "at least 50%"
Can anyone tell me please.?

jamesd

JamesHoward wrote: »

I am trying to work out whether it is worthwhile buying the £25 a week top up to State Pension scheme just available from 12th October.

How old are you? How is your health? Those are the two key things to know to work out the value.

In general unless you are at least 78 years old you should der for up to five years, ending no later than 78, before you consider Class 3A. If you are planning to defer that long then Class 3A on top could be useful.

Have a read of this topic and particularly these two other posts 1 2 for more guidance on when it's a good or bad deal.

JamesHoward wrote: »

I have read on the Govt. website & also on Martin's guide that in the event of my death my wife can inherit 50% to 100% of this.
I cannot find from the Govt. phone enquiry lines how to discover whether it would be 50% or 100%, & Martin's Guide states "at least 50%"
Can anyone tell me please.?

It's too fiddly to try to work out what would apply because it depends on your particular contribution history. The Class 3A helpline should be able to tell you but they might be too busy at the moment since it just launched.

jamesd

DevonWolf wrote: »

Contracting out has nothing to do with the level of the basic state pension amount. So everyone should get the same. However, if you retire before 04/2016 you will get less. Why? Cost cutting exercise.

That is not true. The flat rate is a combination of what the basic state pension would pay plus a part of what a person with a full working life could get from the additional state pension. It is not comparable to just the basic state pension.

DevonWolf wrote: »

If you were not 'contracted-out' you will get the second state pension on top of the basic state pension up to the new maximum the Govt. decides.

If you were contracted-out you will not get the second state pension but will still receive your company/private pension.

A person who was contracted out can still get additional state pension if they had years not contracted out or even if they just worked during the S2P years. The transitional rules do not cap the additional state pension at the flat rate cap level, it can be higher if you have already accrued a higher amount, what happens then is that you just don't get any more added for working more years.

DevonWolf wrote: »

A more important question is why the basic state pension is taxable. There are many cross-party financial experts/reports that support the opinion that if the basic state pension was not taxable then this would lead to a fairer society.

A taxable state pension is a progressive measure that claws back some of the state pension from those who have higher incomes and are in lower need of it. Those with incomes below it will get it all tax free, up to the personal allowance while those with higher incomes will pay some income tax. It's in effect a bit of means testing via the tax system.

slade1961

hello

can anyone make sense and simply guide me through this maze called a state pension forecast please?

applied for a forecast

it said based on rules of new state pension system april 6 2016

my estimate for pension on 2028 will be £152.19 @ 38 qualifying years .

cope amount £29.44.

add cope amount and state pension = £181.63

under old rules i get estimate £115.95 + asp £36.24 = £152.19


now do i minus cope amount from new rule estimate £152.19 = £122.75 and is that figure my true pension forecast

under new rules? where is my foundation amount and which figure do i accept as my higher starting amount.


i also got forecast from the gov new verify website which says my estimate to date 5 april 2015 is £156.34 different from from my original forecast 2014/15 of £152.19.



confused to say the least i hope to have made this clear as best i can thank you for any opinion.