Additional state pension

CLAPTON

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.

you are not serious are you?

savageHK

Nearly_Old wrote: »

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.

Ah, OK. The basic news coverage just seemed to state that the pension credit would go - not the additional SERPS/S2P. Although the replacement of SERPS/S2P with an additional 'flat rate' pension has been in the pipeline for some time now.

Perhaps the logic is that this £140 per week will now be topped up by private (i.e. non-state) pensions, with the new NEST/AutoEnrolment rules coming in shortly?

elantan

CLAPTON wrote: »

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

i agree Claptopn ....i have to admit whilst i would love to think that i would be paying less i really doubt if this will be the case ... if anything i expect to pay more through taxes etc

elantan

Nearly_Old wrote: »

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.

yep that's the way i read it as well ... i will miss out due to the fact i couldnt get a company pension and wasnt aware of contracting out to a personal pension

i am not in a well paid job by any means ... i earn approx 10k a year ... but i did pay the second state pension ... so i am going to loose out ... i am not alone though as i understand there will be others that will be as well ...

elantan

savagehoutkop wrote: »

Ah, OK. The basic news coverage just seemed to state that the pension credit would go - not the additional SERPS/S2P. Although the replacement of SERPS/S2P with an additional 'flat rate' pension has been in the pipeline for some time now.

Perhaps the logic is that this £140 per week will now be topped up by private (i.e. non-state) pensions, with the new NEST/AutoEnrolment rules coming in shortly?

i have taken out a nest pension through my employer ... they pay a whole £8 a month into my pension ... by the time i retire i will be able to buy a penny sweet with my contributions

savageHK

If I remember rightly, Nest contributions will increase over time - so hopefully it will get to more than £8 a month.
http://www.nestpensions.org.uk/schemeweb/NestWeb/public/NESTforSavers/contents/contribute-to-nest.html

As for the contracting-out point, you can no longer contract out via your own personal pension (from 6 April this year) - so while it might have been best for you in the past, looking at the numbers now, it's not something you can do going forward.

elantan

yep savage thats what i said earlier up the page ... i missed out ach well i am sure something will come along

as far as i remember the employer contributions go up to 3% which means i can look forward to £24 a month .... wooo hooo maybe a loaf of bread and a penny sweetie a month

BobQ

Nearly_Old wrote: »

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.

What is the rationale behind this change?

Nearly_Old

BobQ wrote: »

What is the rationale behind this change?

It appears to be trying to simplify the system; i.e. one single NI rate and one single standard pension. The principle is basically the same as the one being introduced to the benfits system; i.e to introduce a single universal benefit payment - as explained to me by my wife who works in LA Revenue & Benefits. There are also real benefits to some pensioners; e.g. those who qualify for pension credits but have not claimed them and women who may not have full NI contributions. But as it is cost neutral for every winner there has to a loser.

My state pension is due in Apr 14 so, as it stands at the moment, I'll stay on the existing system with virtually no SERPS/SP2 as I was contracted out for 37 of my 41 years. But as the new system will require running the existing and new systems in parallel for 30yrs(?) I wouldn't be surprised if they tried to get people switched across to the new one.

jamesd

Under the current system people who accumulate more than about £35-45,000 in pension and other savings for retirement get full benefits. Above that and until they are no longer entitled for any benefits their extra retirement income makes little to no difference to them. The proposed new system increases the minimum state pensions payout to above the benefit level so that anyone can expect to get an increase from saving for retirement without a gap where there's no extra income as a result.

Among other things it's to be done by increasing the subsidy from average and higher earners to those who have never worked, didn't work much or just didn't put away much for retirement. The subsidy will lower the rate at which additional state pension payments to those average and higher earners, changing them to a lower flat rate that is the same for everyone. Labour already set this up but the proposals mean that it would happen much faster instead of at whatever rate inflation produces.