Can someone clarify for me please

mazzy

I read in another post that those who contracted out into private pensions will not have deductions made from the additional state pension, is this correct? or have I completely misunderstood. The post said that it was only those in workplace pensions that get this deduction would love to know if this is right as an extra £50 a week will make a lot of difference to us.

My husband was contracted out into a private pension scheme for about 18 years of his working life. He will retire Sept 2014 age 65 and has worked continually since the age of 15.

His SPF had the basic pension plus about £50 additional SP, so does this mean he will get all of that without any deductions?

I keep reading the links but hate to admit I don't really understand them.

DavidLaGuardia

Worry not :cool:

No deductions will be made.

Any contracted out time will not be on the forecast to start with. The bit showing on the SPF comes from a time when he Was NOT contracted out .

mazzy

Thank you so much, that is really good news :j

jamesd

It depends on exactly when the contracted out periods were. There was a period when Additional State Pension was being credited and periods when it wasn't. If the contracted out time was during the time when no Additional State Pension was being added for those who were contracted out then the State Pension Statement would accurately reflect what someone is entitled to under current rules.

If you can say when the contracted out periods were it would be possible to say more about just what will happen for those periods.

These two documents contain the rules and tell you what to expect:

• Single-Tier State Pension Fact sheet - general introduction.
• The Single-Tier Transition and Contracting Out - more detailed descriptions of date ranges and calculations.

Very briefly, if the contracting out was from 1997 onwards the State Pension Statement will be accurate. For periods from 1978/79 to 1996/97 there has to be some deduction because Additional State Pension was being credited even for people who were contracted out.

mazzy

:(:(Unfortunately it was during the earlier period he was contracted out. Can't remember exactly when but definitely during the early to mid 80's until around until 2000. So we can expect some deduction then.

jamesd

Bye the way, I just used the flat rate documents because the second of them contains a good description of the periods. It doesn't mean that he'll get the flat rate pension, he won't with his state pension age.

There's a more complete description of contracted out deductions from the House of Commons Library that doesn't mainly discuss the flat rate pension.

mazzy

Thank you, I get the gist of it now I think. He will definitely lose some, that is as I thought before, I just got confused by another post saying it didn't involve private pensions. He will get some extra I assume from the years contracted in, will just have to be patient and wait and see.

I wanted to retire soon after my husband but will only be 61. I have a final salary pension which kicks in at 63, was thinking of going 2 years early. We have never been high earners so can manage on a reasonable weekly sum, the extra would have helped bridge the gap until my SP came in. May have to have a rethink about my retirement date. Its really weighing up what is most important, time or money.

McKneff

mazzy wrote: »

Thank you, I get the gist of it now I think. He will definitely lose some, that is as I thought before, I just got confused by another post saying it didn't involve private pensions. He will get some extra I assume from the years contracted in, will just have to be patient and wait and see.

I wanted to retire soon after my husband but will only be 61. I have a final salary pension which kicks in at 63, was thinking of going 2 years early. We have never been high earners so can manage on a reasonable weekly sum, the extra would have helped bridge the gap until my SP came in. May have to have a rethink about my retirement date. Its really weighing up what is most important, time or money.

Always always always time..... an aquaitnance of mine has just died of pulmonary problems suddenly, no warning, aged 55. So if you can manage on what money you get, appreciate the time......

seven-day-weekend

McKneff wrote: »

Always always always time..... an aquaitnance of mine has just died of pulmonary problems suddenly, no warning, aged 55. So if you can manage on what money you get, appreciate the time......

Agree absolutely. A friend of ours has just died from a brain tumour, two months short of his 60th birthday.

We retired in out mid-50s, and lived on my husband's Teachers' Pension for about five years until my State Pension kicked in. Not much money, but we were able to live in Spain for eight years

Glad to say that in 2014 we have more Pensions coming in (his State Pension, my Local Government Pension), and can save most of it as we have got used to living without the money.

No one's last words ever were 'I wish I'd spent more time at work'.

DavidLaGuardia

Thanks for the info Jamesd

I'm a little confused thiough as the OP relates to a person retiring in 2014.

Do the single tier adjustments afect them since I thought this applied from 2016?

jamesd

The single tier adjustments wont' affect them but a contracted out deduction will. I just used the single their documents because they had a good and fairly clear description of when and why there are contracted out deductions in both current and single tier systems.