STATE Pension ALERT !

WE_ARE_ALL_IN?

From 2016 there is a new state pension for those born after 1953.
Read the information on the GOV.UK web site. /"new-state-pension/print" and pay particular attention to Section 4.
Is this a long term intent to remove or means test for the new state pension when you get to the grand old age of 67.

No wonder there was a push to put all employees into work place pension scheme over the last few years.

Work hard , save hard, plan for your future retirment and then find out you have paid into a system that has no intent of paying anything back. :mad:

Well done to the media for ensuring this is not front page news :T
YOU ARE IN IN IT TOGETHER.
Yet another move of the goalposts

antenna

Rubbish..............

dunstonh

Is this a long term intent to remove or means test for the new state pension when you get to the grand old age of 67.

You mean 68 and then linked to average life expectancy.

No wonder there was a push to put all employees into work place pension scheme over the last few years.

God forbid that people should be encouraged to look after themselves.

Work hard , save hard, plan for your future retirment and then find out you have paid into a system that has no intent of paying anything back.

Your sentence starts well but falls apart at the end.

Well done to the media for ensuring this is not front page news

Not much to justify front page.

Yet another move of the goalposts

Yes, its a disgrace that people get so much more pension for a longer period than they used to when it was first introduced.

Your_Hero

Yes - I also have a works pension

This isn't exactly a new discovery. We all knew this was coming to some extent. The UK has a massive demographics crisis thanks to an ageing population. And yes that is why auto enrolment was introduced because the state cannot support everyone. We all need our own private arrangements.

The state pension wasn't exactly going to give us anywhere near the level of income we need. Anyway at £144 per week, it's still ok. This may of course change again in the future, but as I've always told my clients you should treat the state pension as a bonus if you get one and never to rely on it when planning for retirement.

hugheskevi

Read the information on the GOV.UK web site. /"new-state-pension/print" and pay particular attention to Section 4.

You mean this link here? And in particular the section starting:

4. You've been in a workplace, personal or stakeholder pension

Your starting amount may include a deduction if you were in certain:

earnings-related pension schemes at work (eg a final salary or career average pension) before 6 April 2016
workplace, personal or stakeholder pensions before 6 April 2012

This isn't "a long term intent to remove or means test for the new state pension" but is referring to the way the State Pension you will have as at 6 April 2016 is calculated. Which is (summarising very broadly) what you have accrued in the old system, less an amount for any periods spent contracted-out of the old arrangements.

No wonder there was a push to put all employees into work place pension scheme over the last few years.

Contracting-out into all pensions other than Defined Benefit ended in 2012.

Those who are contracted-out are actually those who do well from the new pension arrangements, along with the self-employed.

Yet another move of the goalposts

I'm afraid it was the shooting that was woefully deficient in this case, not the goalposts.

bristol_pilot

hugheskevi wrote: »

Those who are contracted-out are actually those who do well from the new pension arrangements

Can anyone explain why that is the case? I've been in contracted-out final salary schemes my entire career, now it seems an unspecified deduction is to be made from my state pension 'starting amount' that could be the whole state pension as far as I know and I will have only a few years between 2016 and when I retire so not really able to accrue many years under the new scheme.

gadgetmind

If people chose to redirect some of their NI contributions away from the state pension system and into alternative provision, isn't it only reasonable that they get slightly less state pension?

And what on earth is a "works pension"?

xylophone

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf

Have you seen this?

bristol_pilot

It wasn't a choice, it was a feature of the scheme and the old deal was that you didn't get S2P as a result. It would also be reasonable not to get the extra amount under the 'new pension'. What is unreasonable is to get less than the basic pension under the old scheme and possibly no state pension at all (given that we don't know the extent of the deduction yet). I still don't get the statement that those who contracted out will be better off under the new scheme.

hugheskevi

Can anyone explain why that is the case? [why those who are contracted-out do better under new system]

Most of those who have been contracted-out will have a full Basic State Pension (£113 p/w) and a small amount of Additional Pension (as they have been contracted out, so won't have accrued much) under the current system.

Those who are close to State Pension age are no worse off (but little or no better off) from the change, as they receive at least what they would have got under the current system as at April 2016.

Those with a few more years to go to State Pension will start to accrue more pension under the new system (at the rate of £4.24 p/w per extra year of accrual), whereas under the current system they wouldn't accrue anything more beyond £113 p/w Basic State Pension (assuming they have 30 qualifying years, which most will).

So if they have about 8 years left to go to State Pension age those who have contracted out are likely to end up with a full post 2016 pension, rather than the £113 p/w under the current system.

Those who were contracted-in probably already have more than £148, so don't accrue anything more under the new system, but pay the same NICs.

EDIT: should add, the above ignores second-order effects, eg, employers changing pension schemes in response to the abolition of contracting-out, but it gives the general idea.

gadgetmind

bristol_pilot wrote: »

What is unreasonable is to get less than the basic pension under the old scheme and possibly no state pension at all

Fortunately, that's not the case.