New State Pension Proposals

p00hsticks

Zambo wrote: »

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...

... as will the age at which you are able to claim your state pension. Presumably for you (and even more so your wife) that will be considerably earlier than those retiring after 2016 ?

The grass is always greener .......

Perhaps when they bring in the new simplified pension, they could say that women who are already claiming a pension could be eligible for the new flat rate, provided that they agreed to a six year 'pension holiday' where they don't receive anything, to allow for the fact that they have been able to claim a pension six years earlier than those who will be getting this increased rate - I wonder how many takers they would get ?

DerbyPensioner

If you have been contracted out you may find that you will lose more. Your pension provider splits your pension between GMP (Guaranteed Minimum Pension) and the workplace pension. The GMP element is increased by state rules, including 0% for pre 1988 contributions, and the remainder by whatever you pension trustees apply. A good scheme will probably increase by a greater rate than the state pays.
The only real certainty is that you find out how much you have been conned after you retire.
The new proposals, despite claiming to relieve us of the complications, will penalise many of the retired who made proper pension arrangements whilst benifitting those who have contributed less. If you are one of those losing then make your feelings known by e-mailing the PM, Deputy PM, the Pensions Minister and your MP.

Baz_2

The guy from the Motley fool on sky news jsut now said those that opted out of serps would be the losers. How is that? How do you qualify for the £155pw then?

StevieJ

Good to see the Govt are helping people with their pension planning I think the number of years NI contributions people need should be identified ASAP.

At least 30 qualifying years of National Insurance contributions will be required for the full state pension. A minimum level of seven years will be set, under which no state pension will be paid.

bilbo51

Chew this over:

http://www.dwp.gov.uk/docs/state-pension-21st-century.pdf

casey_junior

dunstonh wrote: »

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.

I have benefitted from most of the above and am due to retire in December with an estimated £150 in state pension.Ipaid into a works pension for 21 years while still contracted in, now I find that my works pension which was transferred to a Sec 32 in April 87 is useless, with no comeback as it was taken out 3 weeks before regulation. Those younger than medon't have that cr*p to put up with.

zagfles

Baz wrote: »

The guy from the Motley fool on sky news jsut now said those that opted out of serps would be the losers. How is that? How do you qualify for the £155pw then?

I would imagine they'll apply a contracted out deduction to the £155.

zagfles

jh2009 wrote: »

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.

Yes, it could. What should really be a positive thing could easily end up being a big negative for the govt with all these people who aren't benefitting from the change whining that's it's not fair, despite having got their pension at 65 or even younger!

Dominic9

I would imagine they'll apply a contracted out deduction to the £155.

It looks like that is the case, and for a very long time too...from the document:

We estimate that around half of pensioners could have an offset applied to their single tier pension by around 2050.

:think:

zagfles

dunstonh wrote: »

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.

In addition, NI rates are far higher now than they were in the past, and it's NI which supposedly pays for state pensions, so the later you retire the more NI you are likely to have paid. When I started work NI was around 7%, now its 12% (from Wednesday).