Pension changes - can someone explain?

seven-day-weekend

notbritishgas wrote: »

In the OP.

Right, didn't notice that. Must try harder.

pimento

McKneff wrote: »

Is there any particular reason why he does not work or does not claim benefits.

If he were the wife and was being kept by the husband who earned enough to keep both of them, would you have asked that question?

No. There is no particular reason why he has never worked. I have always been happy to keep him at home.

pimento

He's 57 (58 in August).

We won't be on our uppers, I do have a final salary pension that will pay out but I've a horrible feeling it will give us just enough to disqualify us from any further help.

pimento

laurel7172 wrote: »

Does your husband have Home Responsibilities Protection, pimento (ie has any child benefit been in his name?)? If so, another 14 years of voluntary contributions could well replace that 60%.

We have a son (who is now 21) and when we claimed Child Tax Credit it was in my husband's name. Would that count?

seven-day-weekend

pimento wrote: »

We have a son (who is now 21) and when we claimed Child Tax Credit it was in my husband's name. Would that count?

Was the Child Benefit also in his name?

pimento

seven-day-weekend wrote: »

Was the Child Benefit also in his name?

No. That was in my name.

atush

Too bad, as the carer it should have been him and then he would get the NI contributions.

If he were the wife and was being kept by the husband who earned enough to keep both of them, would you have asked that question?

No. There is no particular reason why he has never worked. I have always been happy to keep him at home.

yes, I would hav asked it.

And If you were happy to keep him all his life w/o working, then you'll have to be happy keeping him til he dies. Your choice.

Or he could now work, or now pay NI contributions going forwards.

Again, your/his choice.

SnowMan

Pimento, the position is set out in the DWP note relating to the proposed introduction of single tier, 'Derived and inherited state pension and the single tier pension'. That is the link xylophone provided earlier in this thread. The note has been quietly sitting on the gov.uk website for the past few weeks before Steve Webb mentioned it at the weekend in relation to a specific sub-category of overseas recipients of state pension, while its affect is of course much wider. The document is accessed from below (or through xylophone's direct link)

https://www.gov.uk/government/publications/the-single-tier-pension-a-simple-foundation-for-saving--2

The scenario that both you and your husband reach SPA under the single tier is scenario 3 on page 15 of that document.

Rather starkly it says

Derived pension entitlement:
43.
Individuals in the scenario above, where both the Dependant and Contributor reach SPa in single tier, will not be able to derive entitlement to Category A or B pensions.

What that means is while you are both alive and above State Pension Age (and having both reached SPA after the introduction of single tier) your husband won't be able to claim a state pension of 60% of yours (even in relation to rights accrued before the introduction of the single tier). So if he has no qualifying years himself then you will get your state pension and he will get nothing.

There are some very limited protected inheritance rights set out there if you read that note.


It is worth considering the thought of your husband paying voluntary contributions for 2006/2007 to 2015/2016 inclusive of both to buy years in his own right. However because of the relaxation of voluntary contribution timescales (see this thread) then he probably shouldn't rush in to pay them now, but you need to think about having the cash ready to pay them before 2019. He may then want to pay voluntary contributions after the introduction of single tier.


I should say I haven't read the DWP note that carefully but that seems to be what it is saying There has to be some possibility that this will be changed before the legislation is enacted as this is in some circumstances a seriously stark removal of accrued entitlement under the old scheme.

seven-day-weekend

pimento wrote: »

No. That was in my name.

That's a shame , it would have qualified him for NI contributions.

He might need to pay voluntary contributions then, until he reaches retirement age, if he wants a Pension. ( It appears the rules are changing about him claiming 60% based on your contributions).

https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions

If he pays from now until retirement age, he will have some pension rather than none.

Get a State Pension Statement for him to see what provision he has so far and then you can plan from there.:
https://www.gov.uk/state-pension-statement

jamesd

pimento wrote: »

He's 57 (58 in August).

That limits the chance to get a lot but if the new plans do come in for a flat rate pension it'll be well worth buying past years to get to at least ten years total.

pimento wrote: »

If he were the wife and was being kept by the husband who earned enough to keep both of them, would you have asked that question?

The answer to that is quite likely to be yes. Today the expectation is that both will end up working. Doesn't always happen but the gender stereotype is not as strong as it once was so you probably don't need to be irritated by that question in this place. Maybe elsewhere, just not here.

Here, the interest is more likely to be to try to be quite sure that there's no working or benefits that would produce some personal entitlement for the husband. Things like benefits for those with disabilities, or for carers of those who need care, each of which could result in entitlement to state pension.

Buying pensions for past years and making ongoing voluntary purchases of NI looks to be the way to go for him. It's a very good deal and an even better one if the new plans do happen.