Flat Rate Pension one year earlier - April 2016

jamesd

Thanks, I didn't know about the S2P credits. Yes, it's fixed £1.70 for those under £14,700.

zagfles

stinktankcynic wrote: »

I cannot see anyone gaining, apart from someone who has not worked much and will now get the £144 instead of £110. Someone who would not get pension credit gains I guess. Good for someone who works 30-35 years and has enough.
The aim is to reduce pension payouts in future for the majority of workers, give low paid workers the same, and perhaps a good excuse to reduce pensions further for people who contracted out. I know contracting out reduces your state pension, but by even contracting out for years you can still get more than £144 now. I smell a rat.

Big gainers are the self employed, since they got no credits towards S2P but under the new scheme they will get credits towards the full single tier pension, and people in contracted out schemes with around 10 years to go to state pension age as they can build further entitlement which people contracted in with 35+ years can't.

laurel7172

zagfles wrote: »

Big gainers are .... people in contracted out schemes with around 10 years to go to state pension age as they can build further entitlement which people contracted in with 35+ years can't.

Would you mind explaining, please, how it benefits those of us who are contracted out? I was under the impression we would have the £144 reduced.

(Contracted out scheme, 20 years to retirement)

Thank you

stinktankcynic

zagfles wrote: »

Big gainers are the self employed, since they got no credits towards S2P but under the new scheme they will get credits towards the full single tier pension, and people in contracted out schemes with around 10 years to go to state pension age as they can build further entitlement which people contracted in with 35+ years can't.

Self employed may have to pay higher NI though. If you have been contracted out for years, any additional past 35 would replace earlier contracted in years? Call me cynical but they could be trying to tuck up people who have been contracted out. Besides this, even if you work and have been contracted out, you have probably paid more NI than someone who is on the dole or sick for years. If you have worked 30 years, with 25 years contracted out, does the new system mean that you have 5 years to go, to the 35, and that you will never get £144?

bigfreddiel

actually it is all a big con trick by the gov - most people do't have a clue what their sp is going to be - some dont even know when they're due to receive it - so headlines that it's going to be £144/ week sonds realy good when compared to the basic £107/week -we allk now thats not a fair comparison, but your general uninformed public don't know that so they think its great - when in reality the gov will be saving shed loads of dosh

great innit

and another thing - this is another reason there'sno taching at school about finances and how to run your life, investing, saving and pensions

if you dont teach anyone how it works how can they ever know anaything

fj

zagfles

laurel7172 wrote: »

Would you mind explaining, please, how it benefits those of us who are contracted out? I was under the impression we would have the £144 reduced.

(Contracted out scheme, 20 years to retirement)

Thank you

Yes, your pension would be reduced because you were contracted out, but you'd be able to build further entitlement after the new scheme takes effect.

For instance, at the switchover, someone with 35 years credits contracted in would be entitled to the full £144, or basic +S2P accrued if more, but that would be it, even if he works another 10 years he'll get no more state pension.

Someone who was contracted out with 35 years credits, they'd get a reduction on the £144, probably to about the current basic pension level say £107, plus the benefit of their contracted out plan and having paid lower NI over those 35 years. The difference is he could work another 10 years and build further state pension, since he hasn't reached the £144 limit.

zagfles

stinktankcynic wrote: »

Self employed may have to pay higher NI though.

Maybe, but this isn't retrospective, a self employed person who gets to state pension age just after the change date would suddenly get a rise from £107 to £144.

If you have been contracted out for years, any additional past 35 would replace earlier contracted in years? Call me cynical but they could be trying to tuck up people who have been contracted out. Besides this, even if you work and have been contracted out, you have probably paid more NI than someone who is on the dole or sick for years. If you have worked 30 years, with 25 years contracted out, does the new system mean that you have 5 years to go, to the 35, and that you will never get £144?

A deduction will be applied to the contracted out years, they haven't said exactly what but I guess it would be similar to how it works now for S2P. So the 25 years contracted out might translate to 18 years on the new system, so plus the 5 contracted in years gives 23, so another 12 years and you'd get the full state pension. Plus your contracted out plan.

Thrupneybit

zagfles wrote: »

Maybe, but this isn't retrospective, a self employed person who gets to state pension age just after the change date would suddenly get a rise from £107 to £144.

What about the other side, I'll be reaching pension age 2weeks before, Will I receive the £144 when it comes in or stick on £107,,,,,,,,, thanks

jamesd

You'll get whatever you're due based on your contributions under the system that applies when you reach state pension age. So £107 if you have no additional state pension entitlement.

LardyCake

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