MSE News: Budget 2012: Single state pension plan confirmed

Old_Slaphead

Linton wrote: »

Yes, but a fair number (like me) would have built up a SERPs pension of more than the increase so we wont be any worse off than those retiring after 2017 from my understanding of how the new system is going to work.

Presumably then that means you won't get the full benefit of all those years contributions (when comparing the pension you receive against that paid to a post 2017 retiree) ?

jamesd

hugheskevi wrote: »

But the situation jamesd outlines is one where the employer decides to respond to the abolition of contracting-out by restructuring their scheme to be less generous

It was one where the employer decides to be exactly as generous. Reducing benefits by exactly the value of the lost NI rebate so the cost to the employer doesn't change at all.

hugheskevi wrote: »

It is further assumed that you would benefit from the new State scheme by getting a higher State Pension than if you had been contracted-out, and the gain from that is equal to the loss you face in your private scheme from the restructuring.

That is uncertain. The state pension accrual would increase under current rules but the government can change the rules and probably will with the introduction of a flat rate pension. That may mean that in effect the lower paid employees gain and the average and higher paid ones lose as a result of government policy, just as would happen in the case of the already withdrawn contracting out for defined benefit pensions.

Whatever else happens, I don't expect an employer who loses the NI rebates to continue paying a pension as if they were still getting them. The liability for that is clearly transferred to the government when it takes back the NI money. It's be obviously unfair to the employer to require them to pay without getting the money to do it with.

Southend1

jamesd wrote: »

It was one where the employer decides to be exactly as generous. Reducing benefits by exactly the value of the lost NI rebate so the cost to the employer doesn't change at all.

That is uncertain. The state pension accrual would increase under current rules but the government can change the rules and probably will with the introduction of a flat rate pension. That may mean that in effect the lower paid employees gain and the average and higher paid ones lose as a result of government policy, just as would happen in the case of the already withdrawn contracting out for defined benefit pensions.

Whatever else happens, I don't expect an employer who loses the NI rebates to continue paying a pension as if they were still getting them. The liability for that is clearly transferred to the government when it takes back the NI money. It's be obviously unfair to the employer to require them to pay without getting the money to do it with.

I wonder how politicians think they are helping people prepare for retirement when they move the goalposts every five minutes? Hopefully there will be a pledge to increase the flat rate pension in line with (a realistic index of) inflation in perpetuity and not to change pension rules for at least another 50 years. Otherwise why would any young person starting work ever believe in pensions? They will be watching what is happening to today's workforce and deciding that its much better to blow all your earnings as soon as you're paid!

Jack_Griffin

SnowMan wrote: »

The flat rate State Pension proposals seemed good to me. Clearly there would be losers who wouldn't be happy but a simple flat system had to be good for the country as a whole.

Unfortunately Cameron has decided to put party political interests before the interests of the country and it is looking unlikely that we will get a simple flat rate pension any time soon see this article.

It appears that the White Paper will now be consultative only.

What that means in my view is that there will be lots of lobbying from groups who are due to lose out (which would have happened anyway). However because the paper is now only consultative the Tories can then just drop the plans or implement a watered down mess. There will be more delays and uncertainties where nobody will know what State pension they will receive, to add to the uncertainty of when they will receive it

He hits the SP2 entitlements he will certainly lose the election. I most certainly would not vote to be screwed like that! (Age 57 & I'd lose a much needed £40/week if it was stolen from me)

I paid the money, I want & deserve the benefit.

I'd urge everyone affected likewise to write to Gideon or Dave to make our feelings plain!

And as for the sentiments of the guy who wrote the quote, well :mad:

taktikback

They have already said that what has been accrued will be honoured - jeez, why can't we just wait for the paper before setting fire to the houses of parliament...

Jack_Griffin

taktikback wrote: »

They have already said that what has been accrued will be honoured - jeez, why can't we just wait for the paper before setting fire to the houses of parliament...

Where have they said that? I've been listening to the news and I have not heard it. That the BBC has not mentioned this problem smacks to me of a conspiracy of silence!

taktikback

google it - it was also in the green paper - if you have already built up a sum greater than the new pension base , then it will be honoured. However, if you have been contracted out, there will be an offset, so you will be reduced to recognise that.

Plenty of fun and games to come....

Jack_Griffin

taktikback wrote: »

google it - it was also in the green paper - if you have already built up a sum greater than the new pension base , then it will be honoured. However, if you have been contracted out, there will be an offset, so you will be reduced to recognise that.

Plenty of fun and games to come....

I've skimmed the Green Paper, it is as clear as mud!

But an article entitled "Workers-could-get-62000-lump-sum-in-exchange-for-state-pension-benefits" on the telegraph website seems to suggest Serps/SP2 wil be honoured in some way but may be bought out.(sorry I'm not allowed to link so the link yet so you'l have to google it).

The Guardian article entitled "state-pensions-retirement-age" says pensions minister Steve Webb promised they will not lose the Serps and S2P benefits they have accrued."I'm not taking any money away. We will honour everything that has been accrued to date". But that was April 2011.

I will not be happy till all is clear!

taktikback

lots more detail hitting the web as we speak - well., lots of commentary, light on detail that is....

big thing being made of mums benefiting because they gave up work to raise families. Don't quite get that - you already get NI credits for as long as you claim child allowance - bit of smoke and mirrors methinks...

uk1

Southend1 wrote: »

I wonder how politicians think they are helping people prepare for retirement when they move the goalposts every five minutes? Hopefully there will be a pledge to increase the flat rate pension in line with (a realistic index of) inflation in perpetuity and not to change pension rules for at least another 50 years. Otherwise why would any young person starting work ever believe in pensions? They will be watching what is happening to today's workforce and deciding that its much better to blow all your earnings as soon as you're paid!

I have to agree and I'm pretty hacked off.

I "did the right thing"

Qualifying for full pension a few years ago meant 39 (?) years NI contributions for men. They kept pointing out that my missed years would mean a reduced pension and suggested I paid up for the missed years which I did. Several thousand pounds. We missed out on other things to do it. I also paid the max into a pension. So no means testing will help me.

The moment HMG received my NI additional payments they reduced the qualifying years to 30 and of course I couldn't have my fat cheque back.

Now because I'm 65 in 2015 I'll miss out on the pension by a year or two that others will get who have contributed far less. The cliff-edge nature of this is hardly fair.

If a commercial organisation behaved in this way they would intervene.