£140 per week pension and S2P

Sterlingtimes

It seems that a bit of pension socialism is likely to come into play.

Suppose that someone's pension forecast is currently £99 pw, presumably they would receive a top up of £41.

A person with a forecast of £141.00 pw (who has not contracted out) would be allowed to keep his/her £1.

A person with a forecast of £110 whose forecast would have been £150 had he/she not contracted out will be entitled to a £30 top up but will have to have £150 minus £110 (£40) deducted and will get £130 pw.

I know that this is speculative (and perhaps a bit naughty) but it looks like a policy that serves to reallocate funds that have already been earned.

Loughton_Monkey

Suppose that the current government gets thrown out, and replaced by Red Ed, who appoints Bob Crow as chancellor. He will impose special tax of 80% on all private pensions over £20K a year, in order to pay for minimum state pension of £20K for all.

Just as speculative.

If you are going to speculate, let's get a bit more creative!

dunstonh

As it stands, the information available is that £100 will be the basic state pension element and the £40 (giving the total of £140) will be paid to those that have not contracted out of the additional pensions. Those that have contracted out will not get the £140. They will get £100.

There is no information on whether the £100 or £140 are absolute figures. i.e. if you contracted out for just one year will it be a full £40 reduction or pro rata. Probably as they will have to work out the different types of contracting out that have existed (final salary schemes and personal pensions for example).

Thicko2

hm sounds a right muddle.

de1amo

i will feed my data in and see if there is a practical answer. Been paying since the age of 17 and i am now 48 but one day soon i will up and go from these shores--i have paid 31 years contributions and got a private pension and intend to pay no more!(i receive my occupational pension due to ill health)

hugheskevi

What year was contracting out first introduced and what is the maximum number of years someone could have contracted out until it is abolished in 2012?

For SERPS, 1978. That was into Defined Benefit schemes, contracting out into Defined Contribution schemes was introduced in 1988.

In 2012 it is only contracting-out into Defined Contribution pensions which will be abolished, so many people (about 7m) will still be contracted out into Defined Benefit pensions.

johnaka

so if you contracted out say 1980 and retire in 2016.
what happened to the 1st 12 years of paying in.yes that is me.
every thing is in a muddle at the moment.
is there any wonder why younger folks are not bothering about paying into pension funds etc.you don't know whether your going to be better off or not by doing so.

dunstonh

is there any wonder why younger folks are not bothering about paying into pension funds etc.you don't know whether your going to be better off or not by doing so.

I don't buy that. You are not going to be worse off. And what is being talked about on this thread has nothing to do with paying into a pension.

There are far too many easy excuses for younger people (or older) to use for not paying. Most of which are rubbish, wrong or just trying to kid themselves. Ultimately, not preparing for your retirement is only going to see that person lose out.