MSE News: Government outlines flat-rate state pension

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
373 replies 47.8K views
13233343537

Replies

  • zagfleszagfles Forumite
    17.2K Posts
    Tenth Anniversary 10,000 Posts Name Dropper Chutzpah Haggler
    ✭✭✭✭✭
    taktikback wrote: »
    I must admit, I'm a bit confused about the rebate derived amount. In 2016, I will have 16 years contracted out (final salary pension) and 14 years contracted in - I will have 36 years NI years.

    It seems to me that if the rebate derived amount is applied in 2016 rather than my SPA of 2029, then the 14 years contracted in years have effectively no value because the 16 years contracted out will bust me back from £144 to about £114.

    If I had been contracted out for the whole 30 years - The foundation amount would be the standard pension of £110 - because that is the higher valuation of old and new scheme.

    Or should the valuation under the old scheme be used? i.e £110 plus the 14 years contacted in- around £140?

    The problem is the rebate derived amount/ COD because under the old rules, it wouldn't be applied until SPA which brings into play all of the contracted in payments from 2016-2029...

    you can see why this has confused me....
    You should get the full flat rate if you work up till 2029, because at the changeover you'll have over 30 years which will give you at least the full basic state pension, you then add £4.11 (approx) per year till you get to the full rate while you're still paying NI/getting credits, so 13 years worth will get you the full £144.
  • edited 18 April 2013 at 12:53AM
    Just_landedJust_landed Forumite
    608 Posts
    Part of the Furniture Combo Breaker
    ✭✭
    edited 18 April 2013 at 12:53AM
    For those that are retiring before the changeover read this, link:-

    https://www.gov.uk/pension-credit

    Forget all the B**l **it told already, welcome to the real world.

    Happy reading

    :)
  • edited 18 April 2013 at 10:01AM
    taktikbacktaktikback Forumite
    278 Posts
    edited 18 April 2013 at 10:01AM
    zagfles wrote: »
    You should get the full flat rate if you work up till 2029, because at the changeover you'll have over 30 years which will give you at least the full basic state pension, you then add £4.11 (approx) per year till you get to the full rate while you're still paying NI/getting credits, so 13 years worth will get you the full £144.

    As of 2016 , I would have paid 36 years NI so should get the basic pension of £110. So if I stopped working that year - would I get no additional S2P credit for the last 14 years contracted in? Seems harsh

    I understand I can make it up at 4.11 per year, so worst case I could stop working after another 8 years in 2024 and get the full £144 (in 2029..)

    We don't know how they are going to work out the RDA yet, but it would make sense if the deduction from £144 was "years in minus years out" otherwise it hardly follows the principle of retaining what has already accrued...
  • gadgetmindgadgetmind Forumite
    11.1K Posts
    Tenth Anniversary 10,000 Posts Combo Breaker
    ✭✭✭✭✭
    For those that are retiring before the changeover read this, link:-

    That only applies to those who haven't made other provision to fund themselves through retirement. I'm not that trusting!
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • SeekTruthSeekTruth Forumite
    207 Posts
    ✭✭
    taktikback wrote: »
    As of 2016 , I would have paid 36 years NI so should get the basic pension of £110. So if I stopped working that year - would I get no additional S2P credit for the last 14 years contracted in? Seems harsh
    ...

    I think in an earlier post you implied your entitlement built up to date under the current scheme was about £140. Your Foundation Amount under the new scheme would be the same, namely £140ish (from what you have said the alternative calculation of £144 minus Rebate Derived Amount would almost certainly be less). So you would probably only require about 1 further year's entitlement to get up to the full amount of the Single Tier Pension.
  • digikidzdigikidz Forumite
    13 Posts
    This is all very confusing but I have read a lot of the links. I will be getting a pension statement online when I've got access to all of the relevant information.

    However I'm having a discussion about this on another forum and, although it doesn't apply to me, one of the ladies is sure that because she opted for the married women's stamp (reduced national insurance contributions) that means that she can't claim the years of child benefit claims as qualifying years with regards to the pension. Is that right?
  • digikidzdigikidz Forumite
    13 Posts
    Okay I found this

    Married women or widows
    If you're a married woman or a widow, you couldn't get Home Responsibilities Protection for any complete tax year if:

    you held a Married Woman’s Reduced Rate Election which was in force for that tax year
    you had chosen to pay reduced rate Class 1 National Insurance contributions as an employee (commonly known as the small stamp)
    you had chosen not to pay Class 2 National Insurance contributions when self-employed

    So does this apply throughout all the years of claiming child benefit even if the woman wasn't working and therefore not paying tax (at the reduce rate or any other) anyway?
  • edited 4 December 2013 at 11:14AM
    SnowManSnowMan Forumite
    3.3K Posts
    Part of the Furniture 1,000 Posts Photogenic
    ✭✭✭✭
    edited 4 December 2013 at 11:14AM
    The minimum qualifying period for state pension is going to be set at 10 years according to this ministerial statement yesterday.

    The Minister of State, Department for Work and Pensions (Steve Webb):

    In advance of the Pensions Bill Second Reading in the House of Lords today, I can confirm that the minimum qualifying period for the new single-tier pension will be set at 10 qualifying years.

    In our White Paper, “The single-tier pension: a simple foundation for saving”, we said that individuals reaching state pension age after the new system is introduced—in April 2016—would need between seven and 10 qualifying years in order to receive any state pension. In response to the Work and Pensions Select Committee’s recommendations, in the Pensions Bill we have limited the minimum qualifying period to a maximum of 10 years. Today’s announcement proposes that the minimum qualifying period be set at 10 qualifying years, with the intention to lay regulations (under clause 2(3) and clause 4(2) of the Pensions Bill) to this effect in due course.

    Putting in place the minimum qualifying period will help ensure that state pension expenditure is targeted at individuals who have made a significant social or economic contribution.

    People can build qualifying years in many ways; for example by paying national insurance or by receiving credits for a wide range of reasons, including caring for children, caring for others, or being too ill to work.

    We have previously published the estimated effects of a 10-year minimum qualifying period in the impact assessment for the single-tier pension.
    I came, I saw, I melted
  • edited 4 December 2013 at 12:32PM
    JezRJezR Forumite
    1.7K Posts
    Part of the Furniture 1,000 Posts
    ✭✭✭
    edited 4 December 2013 at 12:32PM
    More or less what it used to be I think - before the last lot of changes.

    It only really affects people without further contributions in a scheme with reciprocal arrangements.
  • SnowManSnowMan Forumite
    3.3K Posts
    Part of the Furniture 1,000 Posts Photogenic
    ✭✭✭✭
    The Pensions Bill received Royal Assent yesterday, which means it is now an Act of Parliament.

    http://services.parliament.uk/bills/2013-14/pensions.html

    After all the discussion about it in the press, strange that the newspapers haven't picked up on this event.
    I came, I saw, I melted
This discussion has been closed.
Latest News and Guides

Best student bank accounts 2021/22

Incl. free 0% overdrafts and railcards

MSE Guide

Next 50% off sale rumour

Here's what we've found...

MSE Deals