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

SnowMan

zzzLazyDaisy wrote: »

Yep - next general election 7th May 2015 according to this article :j

http://www.parliament.uk/about/how/elections-and-voting/general/

Although they could still do a lot of damage to a lot of people, in the meantime

Yep still lots of time for much more damage

Also SPA will be reviewed in the next parliament under the White Paper proposal :eek:

Basically they will be looking to increase SPA so as to maintain the proportion of retirement to working lifetime (but taking into account other factors).

There is no mention however of the base point for maintaining that proportion, is that ratio now based on current male SPA of 65, or is that ratio based on the future ratio when SPA is proposed to go up to 67 for example.......?

jamesd

Thanks Snowman and bigfreddiel. Looks as though deferring is effectively being withdrawn under the proposed plans by making it an option that's too unattractive to be worth doing. For it to remain attractive it'd need to be close to the current rate. Even the current one isn't attractive enough to get beyond a few years of deferral because of the possibility of dying before breaking even.

uk1

Thanks.

I think that many will overlook how quickly those that defer under the current scheme will "catch up" in absolute pension receipt to those that defer under new rules "a day later". It might be that in the unlikely event that these two notional deferrers wait for say seven years or so the earlier deferrer will"overtake" what was initially the higher pension enjoyed under the new scheme.

The current state pension - deferred - is an extraordinary bargain for those that can afford to wait for it.

Jaycee_Dove

Can confirm that deferral under the current system to 2016 will remain at just over 10% per year (ie 1% per 5 weeks). I was told this on the phone a few days ago when I asked how long I needed to defer my quoted SP to make it the equivalent of the stated new SP of £144. I was told that two years deferral would do so. Also quoted figures up to 2016.

Linton

Jaycee_Dove wrote: »

Can confirm that deferral under the current system to 2016 will remain at just over 10% per year (ie 1% per 5 weeks). I was told this on the phone a few days ago when I asked how long I needed to defer my quoted SP to make it the equivalent of the stated new SP of £144. I was told that two years deferral would do so. Also quoted figures up to 2016.

The current system remains in place until after a Bill changing it goes through Parliament. There is no Bill yet. Parliament can do as it wants within reason. So at the moment no-one can confirm or rule out anything.

uk1

Linton wrote: »

The current system remains in place until after a Bill changing it goes through Parliament. There is no Bill yet. Parliament can do as it wants within reason. So at the moment no-one can confirm or rule out anything.

I would have thought they could change the deferral rate in a standard budget if they chose to.

Jaycee_Dove

uk1 wrote: »

I would have thought they could change the deferral rate in a standard budget if they chose to.

Well I am making all my plans around what the Pensions Office told me this week.

I have been forced into deferring simply because of being self employed and despite having over 40 years of stamps I will need this delay to achieve the same level of pension via the current system as self employed people with 6 - 7 years less NIC payments will get out of the new SP.

This is because I was daft enough to try to do the right thing and save to compensate for having no S2P. The sum left after reasons explained elsewhere is small and so would not come close to plugguing the gap given the current economy. But it prevents access to pension credit to achieve the supposed 'safety net' of £142 pw - which I would get had I never bothered to try to save at all and just expected the state to save for me.

I am now willing to do the right thing again and defer to help myself (even though as I am now a carer I will also by the rules have to forgo my Carers Allowance that I have only recently received because I kept working as well as being a carer as long as I could).

So if they decide to change the rules on deferment as well then that will be the end of me doing the right thing.

I will then just dispose of my savings somewhere or other and claim pension credit and probably get more that way than I ever would by working and saving and not trying to play the system.

Happily the new SP will smooth this mess out and from 2017 will hopefully reward saving. Sadly right now it does not and I have to live in the current position so the government will surely at least help me out by not tinkering negatively any further.