State Pension Forecast

marklv

I recently received my state pension forecast and, to my dismay, it shows only £18 a week from SERPS/second state pension. I'm 42 and have been working since leaving university at 21. Of the 21 years I've only been contracted out for around 6-7 years, and when I left those jobs they should have bought me back into the state system. In the last 6 months I have been in a job which has a final salary pension that is contracted out (against my will, but I have no choice). Should the second state pension forecast not have been much higher? It doesn't seem right to me.

EdInvestor

Remember this pension is earnings linked.Was your salary low when you were contracted in?

marklv

EdInvestor wrote: »

Remember this pension is earnings linked.Was your salary low when you were contracted in?

Initially it was relatively, but not very low, then went up: £12k in 1988, £14k in 1991, then jobless from 1992 to 1994, then c.£17.5k in 1994 to 1996, then £22k until 1998, then £26k until 2000, then £38k and upwards until now.

I still think the second pension forecast should be higher. :rolleyes:

MrChips

Hi,

marklv wrote: »

Of the 21 years I've only been contracted out for around 6-7 years, and when I left those jobs they should have bought me back into the state system.

How long did you stay in each job? If more than two years, I think your benefits vest and there is no requirement to buy you back into S2P.

marklv wrote: »

In the last 6 months I have been in a job which has a final salary pension that is contracted out (against my will, but I have no choice).

By contracting out, your final salary scheme has to demonstrate if offers (generally) better benefits than S2P. Why would you rather be earning S2P instead?

marklv

MrChips wrote: »

Hi,



How long did you stay in each job? If more than two years, I think your benefits vest and there is no requirement to buy you back into S2P.

In only stayed a maximum of around 3 years in each job.

MrChips wrote: »

By contracting out, your final salary scheme has to demonstrate if offers (generally) better benefits than S2P. Why would you rather be earning S2P instead?

Because I want the best of both worlds! My final salary scheme will not generate more than around 45% of my final salary, even after transfers from previous schemes. Will S2P not be compulsory after 2012, or is this just a rumour?

EdInvestor

marklv wrote: »

In only stayed a maximum of around 3 years in each job.

Unless you took a refund of conts these years will remain contracted out.


[quoteq]Because I want the best of both worlds! My final salary scheme will not generate more than around 45% of my final salary, even after transfers from previous schemes. Will S2P not be compulsory after 2012, or is this just a rumour?[/QUOTE]
F/S schemes are excluded from this.

jamesd

marklv wrote: »

Initially it was relatively, but not very low, then went up: £12k in 1988, £14k in 1991, then jobless from 1992 to 1994, then c.£17.5k in 1994 to 1996, then £22k until 1998, then £26k until 2000, then £38k and upwards until now.

Call the helpline and ask them to tell you which years count for the basic state pension and for SERPS/S2P. They can also tell you your reported income every year you were working.

marklv wrote: »

I still think the second pension forecast should be higher.

So do I. Check with them.

As for the pension income, you might want to consider starting a personal pension and using that to generate additional pension capital that you can take an income from when you retire. Among other benefits you'll be able to take a personal pension from age 55. If you want to go earlier than that you'll need to use S&S ISA investing as well. You'd need to be contributing something over £1000 a month more if you were serious about retiring before 55, more likely something in the £1500 to £2000 range. The later you're willing to leave it after 55 the less you need to put in each month.

marklv

jamesd wrote: »

Call the helpline and ask them to tell you which years count for the basic state pension and for SERPS/S2P. They can also tell you your reported income every year you were working.


So do I. Check with them.

As for the pension income, you might want to consider starting a personal pension and using that to generate additional pension capital that you can take an income from when you retire. Among other benefits you'll be able to take a personal pension from age 55. If you want to go earlier than that you'll need to use S&S ISA investing as well. You'd need to be contributing something over £1000 a month more if you were serious about retiring before 55, more likely something in the £1500 to £2000 range. The later you're willing to leave it after 55 the less you need to put in each month.

I will check with the pensions people. Coud be a !!!! up somewhere.

As for retiring at 55, I've just started a new 20 year mortgage at age 42, so no chance of that.