State Second Pension

xxkvbxx

In April of this year the Maximum time for contribution to the Pension component of National Insurance was reduced from 44 to 30 years.

I would like to gain a greater understanding of the methodology for the calculation of:

State Second Pension

Reduction in NI contribution for Opting out

I would also like information on the:

Specific process for opting out

I have made 6 calls the Gov offices related to Pension, NI and Calculations I have been less than impressed with the knowledge and answers provided to my questions on this topic. I have found some non-government information on the issue but nothing that would provide me with an ability to make calculations upon which to make a decision or to be knowledgeable when speaking to an IFA.

Any Help would be appreciated.

generalcuster

xxkvbxx wrote: »

In April of this year the Maximum time for contribution to the Pension component of National Insurance was reduced from 44 to 30 years.

I would like to gain a greater understanding of the methodology for the calculation of:

State Second Pension

Reduction in NI contribution for Opting out

I would also like information on the:

Specific process for opting out

I have made 6 calls the Gov offices related to Pension, NI and Calculations I have been less than impressed with the knowledge and answers provided to my questions on this topic. I have found some non-government information on the issue but nothing that would provide me with an ability to make calculations upon which to make a decision or to be knowledgeable when speaking to an IFA.

Any Help would be appreciated.

Hi,
I can't help you but it is not without trying!

The 2nd Pension was initially set up to 'top up' the state retirement pension to the extent that the more you paid in, the better the 'top up' would be.

I have spent the past 5 years on and off, trying to get to the bottom of not only how it is calculated (that's the easy part!) but also the interactions when the different 'types' of 2nd pension are looked at. It has been known as many things in it's time, and with each and every change, the governments' have put a great deal of spin on the advantages of each scheme. What they failed to do, was to set out the disadvantages!

About 10 years ago I started to obtain on a regular basis (every few years) estimates of what my Old Age pension would look like.
What I can say is that prior to this current change, I was told that I had paid enough contributions to secure a 2nd pension of £65pw in 2014.

The change before that saw my 2nd pension as being £115pw.

What has happened now with this latest change I will find out in due course. Suffice it to say that it will be a lot less than the previous figure of £65pw.

What has happened is that those that have paid a considerable amount in are now subsidising those that either have not put the years in or the level of contributions.

It therefore falls that to work hard, earn a substantial salary (and pay more in national insurance contributions) will not now entitle me to anymore than if I had worked half the number of years on a quarter of what I was earning. The goal posts have been moved so many times!

In conclusion my OAP 10 years ago was looking to be £210pw, last year it is £160pw - God knows what it will be in 2014!

And the best of luck!

sleepless_saver

Try posting your query on the Pensions board, where there are some knowledgeable regular posters.