Additional state pension

elantan

might be asking silly questions here and showing my ignorance of pensions but ...

i ordered a pension forecast (state) through in 2011 for both my husband and myself,

my husbands current additional state pension is £.67 and will go up to £6.03 when he retires taking his pension to £108.18 ( forecast) so he is deff going to make out of the £140 limit ... ofcourse that is until they move the goal posts again


mine is currently £20.16 and will go up to £58.57 when i retire taking my total pension to £160.72 meaning i loose by £20.72 a week

now my husband has a company pension which is not a bad one so we will be ok there ... i dont have a company pension ( just started nest with a 1% contribution from my employer last month) and i try and save money where i can ( had to stop paying into a pension last year as hubby took not well and was off work for an extended period so we needed the money)

is there anyway that i can contract out of this additional state pension so that i can put the money into another pension for myself so that i will not loose the £20.72 a week ... i know for alot of people that may not be alot of money but it might be for me due to low wages and inability to save for a pension just now ... so the £20 a week when i retire though not much might mean i may not have to sit with the heating off and wearing five layers of clothes

if so how would i go about it ?

sorry if this doesnt make much sense , i will answer any questions i can

dzug1

It doesn't make any sense - the £140 a week scheme hasn't started yet and will only apply for contributions after a certain date.

Up until that date you will keep all the benefits of payments already made. They are not going to cut you back to £140 a week

elantan

ok i mustve misheard this but i am under the impression that there is going to be a flat rate of £140 ? is this not the case?

Nearly_Old

elantan wrote: »

ok i mustve misheard this but i am under the impression that there is going to be a flat rate of £140 ? is this not the case?

Reading what has been published so far my understanding is:

It is expected that the new single state pension will be around £140 per week but it is not scheduled to come into existence until either 2015 or 2016. At the moment anyone who has started to receive their state pension (basic and second pension) prior the date of implementation will not be affected. The details currently available also include a statement that the new arrangements will be "cost neutral" so in reality that will probably be winners and losers; e.g. if you have started to receive your pension before the implementation date and it is higher than £140 it will not be reduced unfortunately if it is less than £140 it will not be increased.

elantan

thanks that makes sense ..and it was kindve what i was thinking would happen....

in my case i will not be retired by 2015 i think i have till 2035 or something to go ... so will that mean that when i retire in 2035 that the amount i will recieve will be £140 a week ( or the then equivelent) and not the £160 as i have previously been informed ... with this being the case i was wondering if there was anyway i can divert the additional pension amount into a vehicle which will mean i wont lose the money ( as i say i know it is only £20 a week... but that £20 a week might make a big diff for me)

i think i am trying to understand why am i going to get the £50 odd compared to my husbands £6 odd ... did he do something with some part of his contributions that i shoud be doing ? if i am only going to get £140 can i not divert whatever it is he has diverted into a different pension plan

as i say i dont fully understand all about pensions and i am trying to understand things

xylophone

http://www.direct.gov.uk/en/pensionsandretirementplanning/statepension/index.htm
http://www.direct.gov.uk/en/Nl1/Newsroom/DG_196719
http://www.!!!!!!.uk/state-pensions-flat-rate-moves-close-but-retirement-date-moves-further-away/

elantan

thanks xylophone, have read those links ... it seems the difference between mine and my husbands is the contracting out of serps ... he has contraced out of serps and i havnt ... i shouldve contracted out of serps a while ago ( but obviously dont have a company pension and didnt think to do so in a private pension)

i also note that this year the option to contract out of serps and those that are contracted out of serps will be placed back in to the scheme

so it is too late for me to think about doing that now, so i will just have to accept the situation ... ahh well it was good to find out ... i will continue to try and put money into my pension when i can

thanks very much for the help and advice

dzug1

I think the £160 you have been forecast assumes you will be paying into the second state pension at roughly the same rate as you are now until you retire.

But this won't be the case - when the new scheme comes in there are likely to to be changes in the contribution rates so you (hopefully) won't be paying as much

But it's all a bit speculative - the precise form of the £140 a week hasn't been settled for certain yet. At least I don't think it has. Politicians deal in simple sound bites (£140 a week for all) - they don't like to try to explain complexity and a good proportion of their audience wouldn't understand it if they did.

CLAPTON

dzug1 wrote: »

I think the £160 you have been forecast assumes you will be paying into the second state pension at roughly the same rate as you are now until you retire.

But this won't be the case - when the new scheme comes in there are likely to to be changes in the contribution rates so you (hopefully) won't be paying as much

But it's all a bit speculative - the precise form of the £140 a week hasn't been settled for certain yet. At least I don't think it has. Politicians deal in simple sound bites (£140 a week for all) - they don't like to try to explain complexity and a good proportion of their audience wouldn't understand it if they did.

althought the details of the new scheme are very unclear, I would be absolutely amazed if the NI contribution rate decreases.

savageHK

As others have said, the details aren't yet clear at all, but the £140 a week, if I remember rightly, is simply to replace the basic state pension. Any SERPS/S2P pension might still be on top of that.

Nearly_Old

savagehoutkop wrote: »

As others have said, the details aren't yet clear at all, but the £140 a week, if I remember rightly, is simply to replace the basic state pension. Any SERPS/S2P pension might still be on top of that.

Nice if it was so but the new single pension is supposed to simplify the system by replacing the basic state pension, pension credits and SERPS/SP2 with one single payment. This is an extract from The Losers section from one of the links in xylophone's post:

“Contracted in”. Those people who have remained “contracted in” to the State Second Pension, formerly known as SERPS, could well get a lower pension under the new system. An individual who has maximised his or her contributions to the State Second Pension and is in well paid employment could have received a total pension from the state of up to £200 per week, the new system will reduce this. These people will get a double blow as not only will their overall pension from the state be reduced, but they will have to continue paying National Insurance at the same rate until retirement.