MSE News: Flat-rate state pension could be £155 a week

bilbo51

JimmyTheWig wrote: »

Yes, like all people where serps would have been more than £43 a week, someone whose serps would have come to £50pw will be worse off under the new scheme.
But that would have been the case whether they opted out or not.

I don't understand what you are saying. Can you work an example for me please?

purplelady27

Am I the only person to see that the government is trying to save money on this not give the pensioner extra.

My husband has had a forcast for state pension at retirementin 2013 and with the additional pension he has paid for via serps,extra pension,graduated contributions the total state pension will be £211.00, this is on average earnings of 23000.

If this was 2015? when the new rules apply all this additional pension would dissapear into the coffers and he would be receiving the marvellous £155? a week. £56.00 a week less.
As pay has improved somewhat since the start of extra pension we have all paid a great deal towards it,the government are saying it would only be the very high earners that are going to loose out, but at £23000 averagea is not high earnings and £56 is a lot to loose .

Now take this figure and multiply by the thousands of pensioners that will be retiring after 2015? and you will se that they are actually saving money not giving extra.

Ah you say childcarers working women will be better off , no they already have the home responsibility allowance and with pension credit can get around £136.00 now with inflation that would be around £155 by 2015.

Stargazer57

purplelady27 wrote: »

Am I the only person to see that the government is trying to save money on this not give the pensioner extra.

My husband has had a forcast for state pension at retirementin 2013 and with the additional pension he has paid for via serps,extra pension,graduated contributions the total state pension will be £211.00, this is on average earnings of 23000.

If this was 2015? when the new rules apply all this additional pension would dissapear into the coffers and he would be receiving the marvellous £155? a week. £56.00 a week less.

You seem to have missed these words from paragraph 94 of the Green Paper

"Major change such as this could not be introduced without taking into account the contributions people have made under the current system. Recognising these contributions would inevitably mean that some of the complexity of the current system....would continue during the transition to the single-tier pension."

In other words people retiring after 2015 will still get more than £155 a week is that is what they have paid for up until the change.

StevieJ

bilbo51 wrote: »

From the consultation document p32:

As an example, consider someone who reaches State Pension age retiring with a state [FONT=FS Me,FS Me][FONT=FS Me,FS Me]pension worth £177.60 a week. If this person was contracted out of SERPS between 1978 and [/FONT][/FONT]1997 and accrued a Guaranteed Minimum Pension of £40 a week – which their scheme will pay – they will receive £137.60 a week directly from their state pension.

Play with the figures. If the GMP were say £60 and the state pension was worth say £150, then they would receive £90 per week...?

I'd appreciate it if a pensions expert could step in here to correct me if this situation is impossible and these figures could never obtain, I think we need another question in parliament.

Perhaps they'd put a bound on the minimum payable. And maybe they wouldn't.

Yes, could it be that they are going out to penalise contracted out final salary pensioners, means testing the basic state pension by the back door. This could be another attack on public worker pensions.

JimmyTheWig

JimmyTheWig wrote: »

Yes, like all people where serps would have been more than £43 a week, someone whose serps would have come to £50pw will be worse off under the new scheme.
But that would have been the case whether they opted out or not.

bilbo51 wrote: »

I don't understand what you are saying. Can you work an example for me please?

Ok, lets consider someone for who, over their lifetime of working, serps would be worth £50pw.

A. If they didn't opt out...
Currently they'd get £97 basic + £50 serps = £147.
Under the new proposals they'll get £140.
The new proposals mean they are £7 worse off.

B. If they opted out and their private pension was £60 a week more than it would have been due to the serps contribution.
Currently they'd get £97 basic + £60 private from serps = £157.
The new proposals mean they'll get £140 - £50 (serps deduction) + £60 = £150.
The new proposals mean they are £7 worse off. Again.
Either way they are £10 better off than if they didn't opt out.

C. If they opted out and their private pension was £40 a week more than it would have been due to the serps contribution.
Currently they'd get £97 basic + £40 private from serps = £137.
The new proposals mean they'll get £140 - £50 (serps deduction) + £40 = £130.
The new proposals mean they are £7 worse off. Again.
Either way they are £10 worse off than if they didn't opt out.


Obviously this is only my interpretation of it and I'm sure that there are many other factors involved.

Old_Slaphead

StevieJ wrote: »

Yes, could it be that they are going out to penalise contracted out final salary pensioners, means testing the basic state pension by the back door.

Specifically contracted out final salary pensioners or all contracted out pensioners? And haven't they been paying lower NI contributions anyway?

taktikback

I'm 49 and have 9 years contacted in (current money purchase scheme is contracted in). Prior to that I had 16 years in a final salary (contracted out) scheme. 3 years of bits and bobs before and after university...

Now by my reckoning, they will count my 9 years plus the 18 to go, towards the full flat rate giving me 27 years from the 30 required...might be able to squeeze the 3 years needed out of the bits and bobs and time at university.

So, if I'm correct, that qualifies me for the full whack, plus I don't get penalised for the 16 years contacted out GMP portion of my final salary pension.

So I benefit from being contracted in for the minimum required time for the full pension (30 years) and not being contracted in for 49 years...

...meaning that if you have, or can have, 30 years contracted in, you should contract out immediately for as long as the government will let you (1 or 2 years) because otherwise it's wasted money...

am I close?

bilbo51

Old_Slaphead wrote: »

Specifically contracted out final salary pensioners or all contracted out pensioners? And haven't they been paying lower NI contributions anyway?

People who have contracted out have contracted out of the SERPS/S2P element of the state pension, not out of the basic state pension. Now by a bit of legerdemain, it seems possible that the government might be planning to claw back some of the basic state pension from those individuals. See post #90 above.

sjb1948

I am very perturbed by the way the British govt. makes changes and do not make them apply to everyone, and instead discriminate against the rest of us by either age or by not making new rules retro-active.

This has affected me in a big way three times now, the new divorce laws, preventing me from getting any mainteneance for myself after many years of providing moral support to my ex while he benefitted from higher education and no career breaks, the reduction of the pension qualifying years from 39 to 30, as I was abroad for a few years which meant I could not qualify for additional pension rights, and now the massive difference in the amount of State Pension I will get between me and someone a few years older when it changes.

When changes are made to the Benefits' System it is always applied to everyone, without exception. How and why can the govt. get away with not making the State Pension laws universal with what is a British Citizens' right as opposed to a benefit?

I think that we, as a nation, will only take so much before there is huge unrest. We are being made to pay for what the govt. allowed the banks to do yet the banks are mostly now making huge profits not to mention making huge bonus pay-outs so they're ok and members of our society, especially those who need extra support, are forced to suffer hardships. It doesn't make sense.:mad:

dunstonh

How and why can the govt. get away with not making the State Pension laws universal with what is a British Citizens' right as opposed to a benefit?

Because that is how changes work and have always done so.

Probably, the point of view is that it would be wrong to worry people that are already retired and working to a budget they know whereas those that are not already retired will have time to adapt to changes. If it goes smoothly then it is quite possible they will extend the changes at a later date.

However, life is full of things where some people get them and others dont.

the reduction of the pension qualifying years from 39 to 30, as I was abroad for a few years which meant I could not qualify for additional pension rights

quite right too. You were not here.

yet the banks are mostly now making huge profits not to mention making huge bonus pay-outs so they're ok and members of our society, especially those who need extra support, are forced to suffer hardships. It doesn't make sense.

If you tax the wealth generators of the country too much they will just up sticks and move abroad. You then end up getting less tax in and without the wealth generators, the country suffers more. It may be fashionable to bash them but we would be in a worse situation without them.