MSE News: £140-a-week state pensions on the cards

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

Read the full story:
State pension reform unveiled but no £140-a-week payout confirmed

and the earlier version before Iain Duncan Smith's speech today:


£140-a-week state pensions on the cards

dunstonh

Some also qualify for a second state pension, usually a much lower sum than the basic pension.

it may be worth changing that from "a second state pension" to "additional state pensions" as its not just the state second pension but also SERPS and Graduated Pension that people get (depending on age). The State second pension is a relatively new thing. SERPS is more widely known by people (even if its only knowing it exists rather than what it is).

Someone getting full qualification on S2P now can get around £3500 a year. However, those coming up to retirement can actually get more than double their basic state pension as the terms were more favourable in the past.

We still do no know if the proposals will claw back graduated, SERPS and S2P from people who contracted out. Or if those that have built up an entitlement greater than £140 pw will get to keep it.

The state pension age is already set to be increased in response to people living longer, and the default retirement age of 65 is to be abolished in October, so employers can no longer sack staff who reach that threshold.

The state pension increases are not set to be increased. That happened back in 1995 with the female state pension age increase and then increased to 68 back in 2006. There are currently no new proposals to increase the state pension age further (although wouldnt be surprised to see another 2 years added on two new 10 year tiers in the future).

StevieJ

I can't quite get my head around this, it seems as though people who contracted out because they had good company pensions will be the big gainers, is that correct? Is this a firming of the green paper that was promised a couple of months ago? could be a bit vote winner at the next election. I still don't see how it helps people with small pensions as presumably they will still lose the benefits of rent and rates taken care of if they have extra cash coming in.

gadgetmind

I project that a full claw-back of our Protected Rights would cost me and my wife £90 a week at age 60. I wonder what HMG will give us in return? I guess at absolutely nothing.

Oh, and we can start drawing on PR at age 55 whereas the mirage that is the state pension is hovering off at age 65 but receding as fast as we approach it.

walkerscott

if that would mean that the current minimum weekly existence rate will stay the same ... and if it does, all the top-ups will disappear along with the associated benefits like council tax exemption etc?
Just a thought ... If it does pan out like this then the Government will be saving a great deal and so will the Local Authorities!

Just_landed

The issue I have with all this is :-

Cons put a fairer system together then comes along people like Tony Brown and robs your Pension fund, I wonder if there is a way the new system can be etched in stone then we won't be robbed again.

dunstonh

My protected rights pension pot projects to a weekly income of £157. That is significantly higher than the £140 proposed pension. So, any potential clawback concerns me. As long as the clawback doesnt erode more than the basic state pension element I will not be too upset with that as that would make me no worse or better off. I would hate to see me lose £157 to gain just over £40

Until gadgetmind mentioned his figure I wasnt actually aware of mine as I have always bundled it in with the bottom line. I was surprised to see it that high but not complaining The SERPS years clearly made the difference whilst S2P could never get that high.

strawberrylane

I would be very surprised if the proposal for people that have built up protected rights was to claw back more than the "additional" element of the flat-rate state pension. The question is how will they calculate how much to reduce that additional element by for people with protected rights. A simplified scheme might see, for example, an additional element of £40pw (say) being reduced by £1pw for each year that someone has been contracted out (stopping at zero of course). But its all just guesswork at the moment and is likely to remain so for a while yet I suspect.

bendix

You know, we could of course wait to see what's in the proposals before forming our opinions on them.

Just a thought . .

strawberrylane

Yep, but don't expect anything concrete any time soon.

Moneyer

What is the now the position of those who (with government encouragement) have voluntarily paid lump sums to buy "missing" years of NI contributions? Will they derive no benefit from these payments, and if so will they be refunded?