MSE News: Government outlines flat-rate state pension

Elnw56

I am new to the forum so forgive me if this is in the wrong place. I am 56 years old and have been fortunate enough along with my husband to take early retirement. Have been reading re the new State pension arrangements And am a little confused. I am due to receive State Pension when I am 66 (August 2022) and at present am told I qualify for full pension- I worked from being 18, had seven years at home looking after children, and paid no NI contributions for the last eight months of my employment as I reduced my hours. As I will make no further contributions for the next ten years, would my pension be reduced or indeed, do I still qualify to receive a state pension in 2022?

Old_Slaphead

BLB53 wrote: »

I'm not sure this is correct.

My understanding is that they will compare what you would have got under the old system - £107 + £30, and the new system £144. If you would have got more under the old system you will not lose out but I do not think you get the new £144 PLUS £30.

I may be wrong?

Would that mean that, under the new system, anyone accruing more than £37pw of S2P would not see any benefit ?

SnowMan

Elnw56 wrote: »

I am new to the forum so forgive me if this is in the wrong place. I am 56 years old and have been fortunate enough along with my husband to take early retirement. Have been reading re the new State pension arrangements And am a little confused. I am due to receive State Pension when I am 66 (August 2022) and at present am told I qualify for full pension- I worked from being 18, had seven years at home looking after children, and paid no NI contributions for the last eight months of my employment as I reduced my hours. As I will make no further contributions for the next ten years, would my pension be reduced or indeed, do I still qualify to receive a state pension in 2022?

If you have been told that you qualify for a full state pension that suggests that you have at least 30 qualifying years and credits. If that is the case that would entitle you to a full basic state pension (currently £107pa) and that and any additional accrued second state pension will be protected under the 2017 proposed changes.

It is hard to answer precisely without knowing the exact number of qualifying years (including credits). It is worth getting an up to date state pension forecast. That will show how much state pension entitlement you have already built up. It should also confirm whether you have more than 30 qualifying years. It may not show the number of years, only that it is greater than 30, but you can ring them up and they can tell you how many years you have including credits.

Linton

Elnw56 wrote: »

I am new to the forum so forgive me if this is in the wrong place. I am 56 years old and have been fortunate enough along with my husband to take early retirement. Have been reading re the new State pension arrangements And am a little confused. I am due to receive State Pension when I am 66 (August 2022) and at present am told I qualify for full pension- I worked from being 18, had seven years at home looking after children, and paid no NI contributions for the last eight months of my employment as I reduced my hours. As I will make no further contributions for the next ten years, would my pension be reduced or indeed, do I still qualify to receive a state pension in 2022?

From my understanding, also remember nothing is definite until the bill has been published and passed buy parliament.

You qualify for a pension provided you have paid at least 10 years contributions during your life. So from what you have said you would seem to be well over that hurdle.

The next limit is the 35 years to get a full pension. If you have that you are home and dry. Otherwise I am less clear. There possibly seem to be transition arrangements and/or you can make voluntary payments until your state pension age. Mrs Linton will be in that position so I would also like to get clarity.

BLB53

I took the poster to be saying his/her current accrued state pension was £174 (which might be made up of £107 basic state pension + 67 additional pension). He/she just expressed the £174 as being £30 more than the proposed £144.

I think we are agreeing if you realise that but I could have been clearer in my

Ah, got it - the S2P figure accred todate is £67 (not £30) so yes I think we agree they will still receive the £174 under the new pension.

Sorry for any confusion.

maxmycardagain

ive been s/employed for 20 years, avoided the dole but not made a fortune, paying Class2 NI is as much use as a chocolate fireguard, looks like i may be a winner in all this...

THANKS DAVID!

gadgetmind

Elnw56 wrote: »

paid no NI contributions for the last eight months of my employment as I reduced my hours.

It's possible to earn enough to gain a qualifying year but to still pay no NI. Getting a pension statement is the only way to be sure.

However, even if you have exactly 30 years, you'll get £144 * (30/35) = £123 anyway.

If you currently have S2P that takes you above this, then you'll get the higher amount.

gadgetmind

twentyfour11 wrote: »

I did a pension forecast recently and was given a pension forecast of about £107.50 per week.

As you'll be retiring under the old system, that's what you'll get. However, there are means tested top ups.

BLB53

Would that mean that, under the new system, anyone accruing more than £37pw of S2P would not see any benefit ?

No, you still retain entitlement to what has been accrued with S2P etc but this figure is added to what you would have received under the existing arrangements. If the total is more than £144 then your new pension will be uplifted to that figure.

So if your S2P is £50, you would currently get basic pension of £107 + £50 = £157. With the new pension you will still get £157 but you will NOT get £144 (asuming you have 35yrs NI) + £50 = £194.

Thats how I understand how it will work.

gadgetmind

BLB53 wrote: »

Thats how I understand how it will work.

Well, it's what sections 82 to 84 of the white paper say!