State Pension - how long should we keep

Deals_2

paying into this...I remember reading on this website that the State pension was going to be reformed so it was only really worth paying something on a self employed basis up to a certain date only . could someone remind me the details? thanks in advance

dunstonh

self employed individuals only get the basic state pension of £4381 a year. They do not get SERPS/S2P. You are expected to look after yourself when you are self employed.

£4381 doesnt go very far.

Deals_2

as a self employed person you have to look after yourself but the point i was making was that someone had said something along the lines that around 2014 (not sure of the date that is why i was asking) the system was going to be reformed so after then not worth contributing into or something along those lines for the state pension. do you know of something along these lines. it is in my papers somewhere but i left them abroad and dont have this on me to sort out. thanks

dunstonh wrote:

self employed individuals only get the basic state pension of £4381 a year. They do not get SERPS/S2P. You are expected to look after yourself when you are self employed.

£4381 doesnt go very far.

dunstonh

The move to a single state pension was proposed but the Govt rejected it. It doesnt mean it wont happen in the future but its not happening now.

Contracting out of the second state pension into personal arrangements is likely to cease after 2012 but that legislation hasnt passed yet. That doesnt affect self employed though.

The personal account/national pension savings scheme coming in 2012 only hits employees and not self employed. This is where all employees who are not members of an occupational pension scheme will be opted into a national pension scheme where they pay a percentage, the employer pays a percentage and the Govt pays a percentage of their income.

For self employed it is as you were.

EdInvestor

Deals wrote:

around 2014 (not sure of the date that is why i was asking) the system was going to be reformed so after then not worth contributing into or something along those lines for the state pension.

There is a plan to make changes to the S2P second state pension so that the lower paid get more, whereas currently it is earnings linked.This would make it less attractive to the higher paid employee.

But it is also planned to relink the basic state pension to earnings,which would make it significantly more attractive to everyone.Either way don't write it off.Even at its present level you would have to save around 140k to buy an equivalent annuity on the market.Weekly conts to get the BSP only cost a bit over 2 quid for the self employed.Bargain of the century.