Pension deferral rules

moneyfoolish

kidmugsy wrote: »

So sod the pensioners who might find that weekly suits them far better. We certainly do.

And why, for God's sake, four-weekly rather than monthly? On your reasoning it's more expensive to do 13 times a year rather than 12, and yet for many pensioners it must be less convenient - it certainly would be for us. Brilliant - poorer service at greater cost.

I've just started taking my state pension after deferring for 4 years and was offered the choice of having it paid weekly, 4 weekly or quarterly.

kidmugsy

moneyfoolish wrote: »

I've just started taking my state pension after deferring for 4 years and was offered the choice of having it paid weekly, 4 weekly or quarterly.

I was offered, if memory serves, weekly or four-weekly. I ticked a box for weekly; they plain ignored my request and put me on four-weekly. I phoned, to be met by puckered-lip disapproval. Hence the need to be mulish.

Why they misbehaved on this one point I don't know; they weren't too bad otherwise.

Jaycee_Dove

greenglide wrote: »

What that means is that you cannot get increments (the "increase" you get for deferring or de-retiring) on increments. So you can de-retire after starting to receive SP and you can de-retire after having deferred and started to receive SP.

However any deferment or de-retirement only earns extra money on the basic entitlement (basic pension, AP and GRAD) and not on any increments already earned. You "may" earn increments on inherited increments (from ex-spouse) but DWP may not have considered that.

However the rules definitely allow what you want - defer, claim and paid for a period including increments, de-retire, claim again (re-retire?) and get further increments.

Ah, thanks for explaining this.


So, say you have the maximum SP (£113 ish) + any additional and graduated to equal, say, £125.


If you defer for, say, two years then you get 10.4% of this per year AND any increase in the SP that occurs during the deferral period (possibly two state pension increases).


Will it also factor in any pro rata increases in the additional and graduated pensions over that period, or will the rise simply be 10.4% x the basic state pension for the period of deferral?


Then, if you stop deferring and take the pension and subsequently decide to suspend it for a period - what will any deferred increase be 10.4% of?


Will it be the SP + additional/graduated for the period of deferral only. With any extra built up by the initial deferral taken away from the sum you are actually then receiving before making this add on calculation?


And, presumably, it will be the old system SP for the year of your second deferral that counts - even if (at some point in future) it goes above the new system flat rate one by natural accumulation? Though I guess it will be some years before that happens. And by then they will likely have increased the flat rate new system pension to ensure it stays ahead, in any case.


It is seemingly a complicated system that is going to run for years alongside the new simplified flat rate. So not going to save much money in administration terms possibly for decades?

greenglide

The current rules pensions and the "new" STP pensions will, ultimately, be paid by the same system and will be managed by the same people. The STP pension is not really much different from the current pensions, especially in the early years. The savings, I suppose, will be in the significant reduction in number of people getting means tested pensions credit under the new system (but it will still exist for a smaller number of new claims).

Who, really, expects it to be "simpler".

If you de-retire the increments are based on a percentage of the current basic, AP and GRAD which will have been uprated.

And the STP rules never impact you if you attained SPA before 6/4/2016 irrespective of deferment periods and irrespective of whether the amount you get is less than or more than the STP amount.

Since the government have indicated that deferment will get a lower rate of increments after 5/4/2016 (the STP will not, then, be a "flat rate" will it!) they will, logically pay the current amount for all people currently deferred but there is every chance that after 5/4/2016 people who de-retire from "old style" pensions will only get the lower rate as well. I havent seen any mention of that yet.

You will get, effectively, two sets of increments for the two periods but they will not be shown separately. The increments gained on the first period will have been uprated while you are de-retired but you don't get those increments taken into account in the calculation of the new increments.

Uncle_Stinky

SUCCESS. Have now successfully deferred Auntie Stinky's pension. It took a bit of "No she can't" "Yes she can", the mention of DWP024 and five minutes on hold for 'consultation', but we got there in the end.

Thanks again to all for giving me the confidence to argue the toss. We feel as if we have beaten the system, when in fact we have just got what the system should have provided anyway.

kidmugsy

Uncle_Stinky wrote: »

SUCCESS. ...
Thanks again to all for giving me the confidence to argue the toss. We feel as if we have beaten the system, when in fact we have just got what the system should have provided anyway.

Mulish! Hee-haw!

greenglide

It is a bit worrying isnt it!

While you would expect them not to give out advice it is a bit worrying when you tell them what you want to and they say you can't. Also the computer system must let them change the account status accordingly so it "must be right".