State and private pension

Kintoo

Hi All

I have a pension with work and got a letter yesterday detailing what state pension I would get when I retire (£91 per week it was)

I am very new to pensions (or at least trying to figure them out)

I joined my work pension 7 years ago and am now 30 and at the moment it states if I retire at 60 I will get £15,417 per annum so if I get this do I get my state pension on top of this?

Need to know because I have an annual figure of what I would like in mind and would like to top my work pension up but if they state pension is included I would have to top up as much.

Hope this makes sense?

ReportInvestor

The rules on the state pension are currently in flux. It is the intention of ministers to reduce the contributions needed to qualify for a full state pension to 30 for both men & women from 2010. (Currently they stand at 44 and 39.)

So you should qualify for a full state pension.

But what will that entitle you to?

There is debate about whether the full state pension should be related to earnings or whether it should track inflation (and do you believe the government's measures on inflation?).

Given that state money will be tight by 2050, I don't think you can rely on that £91 going up by more than nominal inflation unless there is a fundamental reform of the state pension system - and only the LibDems are seriously making those noises of the 3 main parties.

But you can rely on politicians to keep putting up the retirement age at which you will be entitled to that state pension. Except they won' flag this up to you in advance or plan ahead since they don't want to get the blame and take an electoral hit.

So if you want to retire at a reasonable age, you need to rely on yourself.

Kintoo

To true

I think the best bet is to add an additional monthly payment into my works pension and hope for the best

ReportInvestor

I think you've sussed out where you stand. You're pretty much on your own. Anything you get should be regarded as a bonus. That's saves on disappointment further down the line.

You could consider ISAs as a possible alternative means of retirement pension saving.

Then if the government doubles the state pension overnight :rolleyes: you have still got control of some of your capital.

jennifernil

Your employers pension scheme rule-book should state how they calculate your pension and whether they take your state pension into the calculation, so read it carefully. If it makes no mention of the state pension then anything you receive for that will be extra. If in doubt , contact whoever adminisers the scheme for clarification.

EdInvestor

I have a pension with work and got a letter yesterday detailing what state pension I would get when I retire (£91 per week it was)

It sounds as though you are contracted out of SERPS/S2P as there is only a small amount of S2P here - about 6 pounds a week.A full S2P will almost double the basic state pension of c.85 pounds a week at present.