Early Retirement

jem16

Jack_Itin wrote: »

Talking to an ex colleague today, who retired at 65, he says that because he was contracted out, for some years, he does not get the full basic pension,I realise that every case is different, but can this be correct ? I am now totally confused........Jack

Basic pension is determined by the number of years NI contributions. Currently it is 30 years and rising to 35 years in 2016. Before 2010 it was 44 years for men and 39 years for women.

Contracting out by itself will not affect the basic state pension. It will only affect additional pension.

So no your ex colleague is not correct and is probably confused over what is basic and what is additional.

How many years NI contributions do you have?

Jack_Itin

Jem, Thanks, I thought as much, I have always worked, so presumably about 45 years worth of N.I contributions, I assume that when I get my state pension forecast then that information will be on it ?.........Jack

jem16

Jack_Itin wrote: »

Jem, Thanks, I thought as much, I have always worked, so presumably about 45 years worth of N.I contributions, I assume that when I get my state pension forecast then that information will be on it ?.........Jack

It's always been on any forecast I have got but my forecasts have to be posted as they can't do mine online. I'm not altogether sure if the number of NI contributions is mentioned on the online statements. As far as I know, though, it's all broken down as basic, S2P/SERPS, graduated pension etc. so it should be obvious.

I don't think you will have any problem regarding basic entitlement. It really should help though to see what additional pension you will have.

Jack_Itin

O.K Jem, Thanks for all your help, April 2015 (hopefully) here we come........Jack

coastline

Jack_Itin wrote: »

Talking to an ex colleague today, who retired at 65, he says that because he was contracted out, for some years, he does not get the full basic pension,I realise that every case is different, but can this be correct ? I am now totally confused........Jack

Millions of people were contracted out and paid reduced NI...as far as I understand this applies to final salary pensions and others.
The government have yet to decide on the calculation for a reduced state pension...we might get to know by 2016.


http://www.ageuk.org.uk/money-matters/pensions/what-the-new-state-pension-reforms-mean-for-you/

jem16

coastline wrote: »

The government have yet to decide on the calculation for a reduced state pension...we might get to know by 2016.

The main thing to know is what you will get under the old (or current) rules. If that is higher than what you would get under the new rules, you will get the that higher amount.

Jack_Itin

Coastline, Thanks, yes mine is a final salary one, which I plan to take in April 2015, 3 years early........Jack

Jack_Itin

Jem, That is good to know, I understand that they intend to ''simplify'' things......at the moment it is all very confusing (to me anyway).....but perhaps there is light at the end of the tunnel !.....Jack

coastline

jem16 wrote: »

The main thing to know is what you will get under the old (or current) rules. If that is higher than what you would get under the new rules, you will get the that higher amount.

I'm guessing the earlier post was saying he wouldnt get the £145 new rate as he was contracted out...so basically he would end up between £115 and £145 a week depending on the number of years in a private pension.
Millions of people will be unaware of this change and assume they will automatically get the new rate post 2016.

kidmugsy

coastline wrote: »

Millions of people will be unaware of this change

Millions of people are unaware of a remarkable range of things. If they won't grow up and read the financial pages, they'll pay a price.