MSE News: Flat-rate state pension could be £155 a week 1 April 2011 at 12:59PM edited 5 April 2011 at 10:57AM in Pensions, annuities & retirement planning 105 replies 17.4K views

Former_MSE_Guy

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

"Women, carers and the self employed could be among the winners from the huge pension shake-up that could see a £155-a-week flat-rate state pension from 2015 or 2016 ..."

Read the full story:

State pension reform: the winners and losers

also see:

Flat-rate state pension could be £155 a week

emc

Does anyone know whether this will mean that people who have been contributing for many years towards their SERPS or second pension will lose out on their entitlement to the second pension?

downshifter98

I think we will have to wait until next week to find that out but it would seem pretty extreme to effectively reduce what people had already 'built-up'.

The system clearly needs improving and you can't please all of the people all of the time; current pensioners who have had the good fortune to receive a state pension at age 60 or 65 will hopefully appreciate that most people receiving the new 'flat rate' will have to wait longer and longer before they actually receive it - 70 plus asap is my guess. With 'nest' starting next year whatever party was in power would have had to remove 'means testing' from the system asap to actually encourage people to want to build up any savings in the first place.

Personally I think that any system that is simpler than the current one has to be a good thing and the apparent fact that 1 and a half million current pensioners don't claim pension credit when they could is damning and reason enough to risk upsetting some.

Life is a precious gift; fairness is a rare bonus.

dunstonh

emc wrote: »

Does anyone know whether this will mean that people who have been contributing for many years towards their SERPS or second pension will lose out on their entitlement to the second pension?

Nothing concrete yet. Suggestion is that £40 of the £140 will be based on contracted in/out benefits. However, that seems far too simple and unlikely given the way contracted in/out benefits work.

One thing is almost certain; there will be no clawing back of protected rights funds. What you have you keep. Its just a case of how they impact in future that is not yet known.

Barneysmom

Can I ask a silly question?
My mom has a state pension, she's very disabled and gets housing benefit.
Will her rise be taken of her housing benefit leaving her no better off?

wakeupalarm

These proposed changes will not effect current pensioners or those who retire upto 2015/16, only new pensioners after the introduction.

Domain.Rider

Does this mean that those taking state pension immediately after the new rate will get more than those taking it immediately before it comes in?

If so, can someone who becomes eligible for state pension defer taking it in order to get the new rate?

dunstonh

Does this mean that those taking state pension immediately after the new rate will get more than those taking it immediately before it comes in?

Theoretically, yes.

If so, can someone who becomes eligible for state pension defer taking it in order to get the new rate?

We don't know. I suspect not as its more likely to be based on date of birth and the point you become eligible for the state pension. However, it is part of the information that will be covered when it goes to consultation and discussion. Remember this is all early information and not the final draft.

bigfreddiel

dunstonh wrote: »

I suspect not as its more likely to be based on date of birth as the point you become eligible for the state pension. However, it is part of the information that will be covered when it goes to consultation and discussion. Remember this is all early information and not the final draft.

I retire this year at 60 from the civil service, I'm 65 in 2016 so will I be eligible for this simplified pension as my NI contributions will have ceased? I've made 40 yrs of contributions so I think I qualify.

cheers fj

bilbo51

Barneysmom wrote: »

Can I ask a silly question?
My mom has a state pension, she's very disabled and gets housing benefit.
Will her rise be taken of her housing benefit leaving her no better off?

I've seen nothing so far to indicate that these changes will affect her in any way at all.

wakeupalarm

"Pensions minister Steve Webb said anyone whose built up additional earnings-related benefits will keep them.

Mr Webb said that during a 'transitional period' some pensioners would receive less than £140 'directly from the state pension'; the rest coming from existing top-ups."

So thats confirmed. The £140/155 state pension will simply be made up of your the basic amount plus your existing serps/s2p to get to the magic £140/£150 amount.