State pension changes - impact on those due to retire soon?

treliac

littlemoney wrote: »

Just when I thought I might get some extra money. With my luck I should have known better. Born to early for increased pension, born to late to avoid original increase in state retirement age.

Worked all my life and saved why did I bother. :mad:

I agree with you 100%..... but I suppose you bothered because you needed something to live on?

Jaycee_Dove

I have discovered that if you are due to retire before 2017 and have just the basic pension (ie if you are self employed under the present rules) but have saved a modest amount to top this up you are worse off than if you had done nothing.

In fact you are better off splurging all your savings and then getting the state to give you pension credit. That will boost your pension to something like the new one tier pension that post 2017 self employed people will get. Whereas with the present interest rates your small savings never could. But whilst you have them they debar you from pension credit.

Any scheme that makes splurging your savings and scrounging on the public to get the best deal has a bit of a flaw in my view.

kidmugsy

Jaycee_Dove wrote: »

I have discovered that if you are due to retire before 2017 and have just the basic pension (ie if you are self employed under the present rules) but have saved a modest amount to top this up you are worse off than if you had done nothing.

Golly, you've completely missed the point: it's because what you've said is true that they are changing the system.

Jaycee_Dove

kidmugsy wrote: »

Golly, you've completely missed the point: it's because what you've said is true that they are changing the system.

I have not completely missed the point.I understand that and in other posts have noted that the changes are a good step forward.

But this thread is titled 'impact on those due to retire soon' if you notice - not 'is this new policy a good idea' - and the impact is exactly as I have reported for those in this category. So it is reasonable in here to be considering the whys and wherefores of the effect on those due to retire soon. Which is that to not suffer a huge gap in income with pensioners of similar age you have to defer for years and use up any modest savings.

rpc

There is no impact on those who are due to retire before 2017. They get the same pension that they expected to get before the white paper was published.

Jaycee_Dove

rpc wrote: »

There is no impact on those who are due to retire before 2017. They get the same pension that they expected to get before the white paper was published.

There IS an effect when that sum that they receive is £37 less than someone who may have paid the same level of NIC payments but has paid them for 5 or more fewer years but has by chance been born one day later.

That is a real consequence of the way that the new scheme will work and IMO cannot be argued as being 'no impact'. It certainly will not look that way if - for instance - your twin was born 2 minutes later than you around midnight and so then reaches pension age into the first day of the new system whilst you are left behind on the last day of the old one and £37 pw poorer.

Again that could really happen.

BLB53

There IS an effect when that sum that they receive is £37 less than someone who may have paid the same level of NIC payments but has paid them for 5 or more fewer years but has by chance been born one day later.

I am due to retire in 2018, so should get the new pension. I have 32 yrs NICs but no longer work so wont get any more.

I also have built up around £25 of serps entitlement.

Under the old system I guessed I would get the full pension of around £107 plus serps making £132.

Now I will get the higher of either the £132 (approx) or 32/35ths of the £144 - just under £132!

I think a lot of people will find they are probably no better off under the new system.

If I were entitled to the serps in addition to the £144 then I agree you might be losing out £37 pw.

mgdavid

BLB53 wrote: »

I am due to retire in 2018, so should get the new pension. I have 32 yrs NICs but no longer work so wont get any more.
...........

can't you pay a self-employed stamp and build up extra years? Or are you claiming JSA in which case you get NIC credits ?

Froglet

rpc wrote: »

There is no impact on those who are due to retire before 2017. They get the same pension that they expected to get before the white paper was published.

Oh yes there IS a big impact.It is called resentment and will be felt by millions of people.I don' t think i have ever known such an unfair system.

The only fair way is to treat everyone the same and give everyone the same basic flat rate pension,letting those who have built up a second state pension keep what they have so far but abolishing it in future.There would also then be no need to make poorer people claim pension credit.Apparently a lot don't so there must be millions floating about that could be used to make this fairer for all.

p00hsticks

Froglet wrote: »

Oh yes there IS a big impact.It is called resentment and will be felt by millions of people.I don' t think i have ever known such an unfair system.

The only fair way is to treat everyone the same and give everyone the same basic flat rate pension.

If by this, you mean that people already retired should be switched to the new scheme, then this wouldn't be fair and is liable to cause much resentment in itself. You can't wind back the clock - many existing pensioners, particularly women, will have started claiming their pension much earlier than people yet to retire beyond April 2017 will have been able to. People retireing now can get a full pension with only 30 years NI contributions, rather than the 35 years people will need in future. How is it then fair to say that these people should be given the new higher rate a well ? That would be having your cake and eating it ....