Flat Rate Pension one year earlier - April 2016

jamesd

If you have 40 years why won't yet get more than £144 in basic state pension plus additional state pension?

gadgetmind

oliver1950 wrote: »

The one who retires before will get £107

Plus all their SERPs and S2P.

the other £144

But this sum *includes* SERPs and S2P. You need to compare like-for-like.

Assuming 20% or 40% taxpayers ( who don't qualify for any pension credit!)

And who more than likely either have a healthy second state pension and/or private pension and/or DB pension.

Plus you need to bear in mind that both were expecting just the £107, so someone who's still getting that (plus all their other provision) has little to complain about.

oliver1950

Because under the existing system you only get £107pw, assuming you have min 30 years. You don't get more for the additional years. In order to qualify for the additional pension you had to be both contracted in to that scheme and earning sufficient to qualify. I didn't qualify.

This I will get the basic £107 and no more. I have some savings which means I can't qualify for the pension credit.

oliver1950

.. yes gadgetmine. its about equity and fairness. 2 people with identical circumstances retire, having reached state retirement age. One just before change , the other just after , the one after the change will have an extra £2k before tax. Not fair, not equitable.

zagfles

oliver1950 wrote: »

Because under the existing system you only get £107pw, assuming you have min 30 years. You don't get more for the additional years. In order to qualify for the additional pension you had to be both contracted in to that scheme and earning sufficient to qualify. I didn't qualify.

This I will get the basic £107 and no more. I have some savings which means I can't qualify for the pension credit.

Were you self employed? If not they you will have some SERPS/S2P or you will have benefits from a contracted out scheme. If you were in a contracted out scheme a deduction is applied to the single tier pension. The qualifying earnings level for S2P is exactly the same as the basic state pension.

jamesd

oliver1950 wrote: »

In order to qualify for the additional pension you had to be both contracted in to that scheme and earning sufficient to qualify. I didn't qualify.

Hard but possible if you were doing only part time work for those 40 years. But pretty unusual, do be sure that you have a state pension statement that really does say you won't get more.

oliver1950 wrote: »

I have some savings which means I can't qualify for the pension credit.

There is some allowance for savings but maybe you really won't qualify. If so, you'll end up getting means tested benefits once you're below the savings limits, assuming you aren't with a partner getting enough to rule that out. Please do claim those, they are there to help people who need that money.

gadgetmind

oliver1950 wrote: »

its about equity and fairness.

No it isn't and it never has been. It's about reforming a very complicated system while trying to ensure that no-one loses out on what they have already accrued. At no point was there a guarantee that anyone would gain anything.

Out of interest, did you read the Green Paper and take the time to send in a written response?

oliver1950

Actually it says I will get £1.51 more, so a total of £108.96 !!

wakeupalarm

But your contracted-out pension will probably be worth more than the serps/S2P you contracted out of, so in total you will have more than £144.

oliver1950

Gadgetmind, please don't be so judgemental, its not helpful. I did read the green paper, I didn't respond. The system is complex, but it works. The object of reform should be to simplify, but it has not done that. We will have a myriad of systems until all of those who retire before 2016 have popped their clogs. Of course you can assume that there will be subsequent changes anyway.

however as a principle I do believe that governments should aim to be equitable and fair. May not be your view, but it is mine.

One of the key reasons for reform, was affordability. After all as a nation we are continuing to live beyond our means by some £125bn a year and more if you assume we ought to be paying down the debt.

Many of the government reforms don't really make significant gains in terms of reducing government expenditure. . If they'd really wanted to get it right they should have perhaps set a lower pension level.