MSE News: Government outlines flat-rate state pension

trenchwars

wakeupalarm wrote: »

The public sector is once again being protected, but please bare in mind that it's not really a increase in NI for private(and public sector) final salary employees, rather it's the removal of a discount compared to what everyone else is paying in NI contributions.

True, but people paying the full amount of NI were building up their S2P. Now they are still going to be paying the full amount but no-longer building up the S2P.

coastline

For the governments statement today you need to read 1.187 up to 1.193...Single tier State Pension...scroll down around half way..

http://cdn.hm-treasury.gov.uk/budget2013_complete.pdf

jamesd

Greenfieldgirl1 wrote: »

As one of the 400,000 women who have had their state pension date altered by almost 3 years, but who will fall 4 months short of the April 2016 date, I feel that I have been dealt a double whammy. I too will have contributed for over 30 years and will still be contributing for at least another 3 years. How unfair! I understand that people are living longer, but the government should have implemented one or the other.

Not at all unfair. A person working most of their life on minimum wage ends up with around £190 a week under current rules so you are likely to end up with more than £144 anyway.

It's also worth noticing that this one year earlier start is partly funded by taking away at least £1.70 a week for life from the state pensions of those who work for that extra year and who have a state pension entitlement that under current rules is more than £144 a week already. That's because there's one less year of added additional state pension accrual. It's not a free gain, it's taking money from one lot of pensioners and giving it to another lot.

Someone who wonders whether they are one of those losing money should get a state pension forecast and find out. If you're entitled to more than £144 already in that forecast and have a state pension age after the start date, you are one of the losers from this change.

Do try to remember that the changing of the state pension age for women is to get them closer to equality with the men, who already lose out by getting their state pensions for fewer years. The men don't get this change to £144 earlier and nor should the women.

oaponice66

I am female and retired at 65 not 60 to gain a top up to my pension which takes it above the £144 per week which is now to be the flat rate.
Do not have a private pension as I had a family to support and never earned enough! I am now finding it hard to manage on this amount, was OK for the first 2 years but am now eating into my savings. My savings come from having moved into a cheaper property and I have a strict budget so all you youngsters be warned. You will need a good private pension.

jamesd

Yes, private pension investing is very important.

It'll be even more important for those middle aged and younger on the flat rate pension because it's a big cut to the state pension for workers. The first £50 or so a week of pension savings will be eaten up by the lost state pension money. That takes about the first £86,000 of pension pots just to get back to where they would be under the current system. (using 3% annuity rate).

ekeir

As someone who is 65 in April 2016 I got quite excited when the chancellor announced that he was bringing forward the flat rate pension by a year. I thought the flat rate pension meant exactly that and anybody with the full amount of qualifying years would get £144. It is only now that I have seen this thread that I realise I wont get that amount because I was contracted out. I can see that this is fair but what annoys me is that with only three years until retirement I still don't know how much I will get.

SHEILA54

I got my pension 2 years ago and had already paid extra contributions to make them up from 36 to 40 years, based on my pension forecast. They then lowered it from 40 to 30 years but too late so I hadn't needed need to top up. I am 62 and get £110 a week as I had to stay at home and work part time as I had a teenager with depression and an eating disorder at the time.
Now it seems that I will be penalised again as I will not get the flat rate that others get.

Com ci com ca

zagfles

SHEILA54 wrote: »

I got my pension 2 years ago and had already paid extra contributions to make them up from 36 to 40 years, based on my pension forecast. They then lowered it from 40 to 30 years but too late so I hadn't needed need to top up. I am 62 and get £110 a week as I had to stay at home and work part time as I had a teenager with depression and an eating disorder at the time.
Now it seems that I will be penalised again as I will not get the flat rate that others get.

Com ci com ca

But you got your pension at 60, that's probably worth about the same as a higher pension paid from 67 or 68.

zagfles

ekeir wrote: »

As someone who is 65 in April 2016 I got quite excited when the chancellor announced that he was bringing forward the flat rate pension by a year. I thought the flat rate pension meant exactly that and anybody with the full amount of qualifying years would get £144. It is only now that I have seen this thread that I realise I wont get that amount because I was contracted out. I can see that this is fair but what annoys me is that with only three years until retirement I still don't know how much I will get.

It's likely to be what you were expecting under the old rules, it won't be less. It's possible the new rules would give you more, as they haven't announced how the contracted out deduction will work, but unlikely I'd say. So just assume you'll get what you were expecting and if you get more it's a bonus.

CRISPIANNE3

zagfles wrote: »

It's likely to be what you were expecting under the old rules, it won't be less. It's possible the new rules would give you more, as they haven't announced how the contracted out deduction will work, but unlikely I'd say. So just assume you'll get what you were expecting and if you get more it's a bonus.

A great improvement. Well done!