early retirement

xylophone

Am I right in assuming I will have NI credits for the time I had my children?

Have you looked at the first link in my post 2?

xylophone

I thought if you were contracted out, then you did get SP2 or/and Serps.

As far as I know, both my OH and I do.

We were born 1944 and 1949 respectively.

You really need to get a pension forecast and ask about SP2/Serps

See https://forums.moneysavingexpert.com/discussion/comment/60319901#Comment_60319901

https://forums.moneysavingexpert.com/discussion/comment/60448917#Comment_60448917

which relate to current rules and the discussion here https://forums.moneysavingexpert.com/discussion/comment/60393069#Comment_60393069 regarding the single tier pension.

SeekTruth

mazzy wrote: »

Thanks so much for your replies. I have been contracted out all the time I have worked for this company so that will be 30 years by the time I retire so I will get no added state pension, I know it will be deducted down from the state forecast of £144 but should not end up below todays pension ammount....

As regards Additional State Pension, wait until you receive your pension forecast - you may be pleasantly surprised (it all depends on the actual level of earnings since 2002).

Your pension under the Single Tier scheme (assuming it is introduced before you reach State Pension Age) will not be less than your entitlement under the current scheme at the date of transition.

If the Single Tier scheme is introduced in April 2016 and your entitlement at transition is less than £144 (under both old rules and new rules) then each year of work after April 2016 will add approximately £4.11/wk to your state pension [I am assuming that even someone in your position of having 35 qualifying years would still be able to pay voluntary NI contributions as an alternative to working to build up towards the £144/wk - perhaps someone else could confirm this view?]

Even though I've tentatively mentioned voluntary NI contributions, please note that for someone with 35+ qualifying years there is absolutely no point (as regards State Pension) of paying any voluntary contributions under the current pension scheme. For those with less than the nominal 'full' entitlement at transition to Single Tier (£144/wk in 2012/13?) there may be some point in paying these contributions.

NAR

mazzy wrote: »

My husband will retire December 2014 at 65, I am not due to retire until July 2018. He would like me to retire at the same time as him as otherwise he will be nearly 70 before we have retirement time together.

mazzy wrote: »

I sent for government pension forecasts yesterday so hopefully will get them in a couple of weeks.

My husband and I are foolishly both smokers so I think our lifespan will be reduced by at least 10 years. There is also heart disease on both sides of our family so another reason to suppose we won't be looking at a long retirement. Just being realistic here as I think it is something to take into consideration.

mazzy wrote: »

My husband will be able to have more say in how his pension is paid as its not final salary one.

Its really my husband who wants me to go at the same time as him, doesn't want to be home alone and says we deserve at least some quality time together.

Bottom line here is do you want to spend quality time with your husband or work extra years to ensure you have a more comfortable lifestyle if you retire later?

Both of you will have options over how your pensions are paid to you, so finances shouldn't be an issue.

mazzy

xylophone wrote: »

I thought if you were contracted out, then you did get SP2 or/and Serps.



See https://forums.moneysavingexpert.com/discussion/comment/60319901#Comment_60319901

https://forums.moneysavingexpert.com/discussion/comment/60448917#Comment_60448917

which relate to current rules and the discussion here https://forums.moneysavingexpert.com/discussion/comment/60393069#Comment_60393069 regarding the single tier pension.

Thanks for your reply. I know I may possibly get a little extra and so will my husband as he wasn't contracted out for as long as I have been. As far as I understand it the new state pension will be reduced if you were contracted out but if you would have been better off contracted in the government will make up the difference.

My head is spinning after reading so much about it and I may have got that wrong or misinterpreted it. Were you both contracted in at any point during your working life as I don't think contracting out started when you would have been starting work so I am guessing that you had a least some your time not contracted out which would give you some additional pension. Reading that back it sounds muddled sorry about that.

SeekTruth

mazzy wrote: »

... As far as I understand it the new state pension will be reduced if you were contracted out but if you would have been better off contracted in the government will make up the difference....

At transition to the Single Tier Scheme your starting point in the new scheme (Foundation Amount) will be calculated as the greater of:

1. Your entitlement under the current scheme - the state pension forecast will tell you the current situation, from what you've said it should be a full basic pension £110.15, possibly plus some Additional
2. Your entitlement under the new scheme, as you have 35+ qualifying years this will be £144, but there will be a deduction from this to 'correct' for your Contracted Out years.

Until you get the official state calculation for your particular case (presumably around the transition date) then I'd suggest that you assume you get the amount in (1) above, and if you get more treat it as an unexpected bonus.

... I don't think contracting out started when you would have been starting work so I am guessing that you had a least some your time not contracted out which would give you some additional pension. ...

Earnings-related pension started with GRB (Graduated Retirement Benefit), which ran from 1961 - 1975.

SERPS started in 1978 and I think it was then that 'Contracting Out' was first permitted.

The reason I've suggested that you may have some Additional Pension is to do with the way S2P (introduced 2002) works. As I understand it even Contracted Out employees, if they earn less than about £40,000, can gain some Additional Pension - although it may be very small.

mazzy

SeekTruth wrote: »

At transition to the Single Tier Scheme your starting point in the new scheme (Foundation Amount) will be calculated as the greater of:

1. Your entitlement under the current scheme - the state pension forecast will tell you the current situation, from what you've said it should be a full basic pension £110.15, possibly plus some Additional
2. Your entitlement under the new scheme, as you have 35+ qualifying years this will be £144, but there will be a deduction from this to 'correct' for your Contracted Out years.

Until you get the official state calculation for your particular case (presumably around the transition date) then I'd suggest that you assume you get the amount in (1) above, and if you get more treat it as an unexpected bonus.

Earnings-related pension started with GRB (Graduated Retirement Benefit), which ran from 1961 - 1975.

SERPS started in 1978 and I think it was then that 'Contracting Out' was first permitted.

The reason I've suggested that you may have some Additional Pension is to do with the way S2P (introduced 2002) works. As I understand it even Contracted Out employees, if they earn less than about £40,000, can gain some Additional Pension - although it may be very small.

Thanks for that, I am awaiting a pension forecast so I amy have a better idea then.

Am I right in thinking that the government make some sort of allowance if you would have been better off contracted in. It won't matter in my case as I my final salary pension would take me over the £144 but may in my husband case as regards additional state pension. He will retire at 65 in 2014 and was contracted out for at least 18 years.

xylophone

http://www.dwp.gov.uk/docs/single-tier-pension-transition-technical-note.pdf
Have a look at the above.

SeekTruth

mazzy wrote: »

...
Am I right in thinking that the government make some sort of allowance if you would have been better off contracted in. It won't matter in my case as I my final salary pension would take me over the £144 but may in my husband case as regards additional state pension. He will retire at 65 in 2014 and was contracted out for at least 18 years.

Sorry, I don't know of any such commitment. All I can think that you may have seen is a discussion of GMP (Guaranteed Minimum Pension). GMP applied to people Contracted Out of SERPS between 1978 and 1997. The Contracted Out scheme (typically the employer's pension scheme) committed to providing a pension at least as high as GMP, which was intended to be 'broadly equivalent' to the amount of SERPS given up by contracting out.

Dunroamin

Have you considered downsizing to release additional funds?