Srp/serps/s2p

Dunroamin

I don't often post on here so I apologise in advance if I'm asking a stupid question.

I understand the basics of the current state provision but I wonder if it's possible for someone to have worked full time for the required number of years and not receive either a contracted out personal/occupational pension nor additional payments through SERPS/S2P?

It seems to come up frequently on another board I post on and it's been puzzling me.

Thanks.

jamesd

It is not currently practically possible for PAYE because as soon as someone passes the threshold for having to pay NI there will be some S2P and hence some additional state pension. Maybe not much, but some. It's calculated monthly, so even variations between days in a month can push someone on a level income at the threshold over it some months.

I don't know the rules for SERPS or graduated retirement pension that preceded SERPs to comment on those.

The self-employed who haven't worked much in PAYE employment could do it and still work full time.

I doubt anyone could actually get into that situation without lots of work to contrive to be there, though the always self-employed case could get there.

xylophone

http://www.hmrc.gov.uk/nic/add-state-pension.htm

"State Earnings Related Pension Scheme (SERPS) will be payable if, in any tax year since April 1978, standard rate Class 1 contributions have been paid on earnings between the Lower and Upper Earnings Limits.

http://en.wikipedia.org/wiki/State_Earnings-Related_Pension_Scheme

http://www.thisismoney.co.uk/money/pensions/article-1585149/The-State-Second-Pension.html

Andy_L

I think the self-employed don't receive S2P, along with a lot of other stuff, but would have been paying a lower NI rate

dunstonh

I wonder if it's possible for someone to have worked full time for the required number of years and not receive either a contracted out personal/occupational pension nor additional payments through SERPS/S2P?

Self employed dont currently qualify for SERPS/S2P. That is your most common example. That is why it has always been more important for the self employed to pay more towards their retirement provision.

Dunroamin

Thanks for the replies, some of which I understand. (Blush)

I don't think that most of the people I'm talking about have actually been self employed but perhaps I've misunderstood.

zagfles

Also married women who have been paying the lower "married women's" rate of NI since the 70's. They wouldn't get credits for the basic state pension either, though they might get some from their husband's NI contributions.

http://www.hmrc.gov.uk/ni/reducedrate/marriedwomen.htm

jamesd

Dunroamin wrote: »

I don't think that most of the people I'm talking about have actually been self employed but perhaps I've misunderstood.

That's the easy possible case that is still possible for new people today. But how self-employed people get paid varies. Some do it by setting up a company and making themselves PAYE employees of the company.

Assuming the flat rate state pension comes in, nobody under that system will accumulate more earnings-related pension. And what's accumulated for those under around 40-50 today will effectively be confiscated because it'll in general vanish as under the £144 level. So instead of building it up above that what they have built up already will be ignored and not added to.