New State Pension Proposals

Zambo

The new State Pension proposals are outrageously discriminatory and divisive. Both my wife and I retire in 2013, and for us, our standard of living in retirement will be dictated by an accident of birth. Our group have already had their retirement plans messed around by changes to the retirement ages (and changes to those changes) so our plans have been thrown into disarray once already. This adds insult to injury.

We will not be entitled to pension credits, because we have been responsible and put some savings away, and I also have a company pension, yet if I retire two years later, this wouldn't make any difference to me getting the full flat rate. This will mean a difference of about £100 per week to us. I'm seething.

bilbo51

Do you have any SERPS/S2P entitlement or have you been contracted out?

StevieJ

There must be some big gainers i.e. men who contracted out who have retired early with a decent private pension and start a state pension between 2016 - 2019. They will still retire at 65 but also receive the enhanced pension.

jh2009

I agree. It sounds like the change will apply for new pensioners reaching state pension age from 6 April 2015. Those that reach state retirement age before that date it appears will be stuck on the old rules. My mother will reach state pension age 2 weeks before 6 April 2015 and shes fuming about it.

I assume that having a £150 a week state pension for new claimants won't cost much to start with, and the cost will be offset by the rise in state pension age to 68 which is slowly being brought in. I assume that they will argue existing pensioners can claim credit in any case under existing rules that will match that, and that putting all existing state pensions up to £150 per week means a huge cost to top up the wealthiest pensioners.

Of course its totally unfair on those who retire in the weeks and months before the change, and who have modest private retirement income.

Whats very interesting is that any change looks pencilled in to come into effect on 6 April 2015. With the next general election scheduled for May 7th 2015. We all know the strong activeness of the pensioner vote, so could be a potential time bomb for the government if this goes through as reported.

stagey_2

does this mean that however much NI you have payed or not - that you will get the new flat rate of £150 - so a couple would have £300 pw -

puddy

i have never been contracted out (paid a private or work pension) does this mean that my enhanced pension amount was a waste of time?

bilbo51

puddy wrote: »

i have never been contracted out (paid a private or work pension) does this mean that my enhanced pension amount was a waste of time?

How SERPS/S2P is to be handled in the transition is a question that has been studiously evaded by the politicians so far. It's the first thing I'll look for in the green paper.

dunstonh

our standard of living in retirement will be dictated by an accident of birth.

So you have benefited from higher SERPS than those younger than you.
You are also going to have a earlier state pension age than those younger than you.
You also benefited from higher tax relief in the past than those younger would have missed out on.
You also benefited from a better tax free position than those younger who missed it.
We can extend other things like MIRAS on mortgages that you may have got but those today do not get or LAPR on life assurance which those today do not get.

Things change. Things move on. Some things will get better, some things will get worse.

If you have SERPS/S2P (especially if contracted out then there is a very good chance that you are better off than the figure given in the proposals.

Thicko2

I wonder if the £155 will be linked with CPI or wages increases.

I presume i will loose the contracted out rate of NI for the cost of this.

hm - so i will be paying at least 3% more for less benefits of my public sector scheme and probably pay 1.6% more NI as well. On top of the current hike.

After 2 years of pay freezes, job loss threat and loss of child benefit i can at least play my part of we are all in this together.

That reminds me i must get some tax avoidance to help reduce my trust funds tax liaility as well. George, David any ideas?

puddy

i thought the proposals talked of £140 per week not 150/155?

bilbo51

puddy wrote: »

i thought the proposals talked of £140 per week not 150/155?

£140 in today's terms - more like £155 by 2015/16 after allowing for increases in accordance with the government's so called triple-guarantee