State pension estimates for 2016 +

eribaman

Just received my statement of the New State Pension estimate.
I have 39 qualifying years and was contracted out during my employment.
I officially retire in March 2017.


Under the New State Pension Rules the amount is £38.92/week
Under the Existing SP Rules the amount is £117.35/week.


I'm not sure whether they give the lower amount to make you grateful for the higher amount which is about what the current State Pension would give you.


All the political kite flying of £140-150 /week seems only for a minority of people.


eribaman.

JohnB47

eribaman wrote: »

I'm not sure whether they give the lower amount to make you grateful for the higher amount which is about what the current State Pension would give you.

This sentence makes absolutely no sense to me. Anyway, does your statement not make it clear that you will receive the larger of the two amounts? Because that's what I believe is the case.

eribaman

Of course I will receive the higher amount.
I was just trying to say (obviously unsuccessfully) that the way the statement is produced the higher amount looks so much better than the lower amount, hence the subliminal thought that you have got a great deal.


eribaman

drumtochty

eribaman wrote: »

Of course I will receive the higher amount.
I was just trying to say (obviously unsuccessfully) that the way the statement is produced the higher amount looks so much better than the lower amount, hence the subliminal thought that you have got a great deal.
eribaman

erbaman

You like myself have an occupational pension that is paying or will be paying two amounts of money to you in retirement but in reality one headline amount of money.

1 An amount of money based on the savings of NI contributions that you and your employer did not put in the NI pot. Therefore your employer put their NI saving into your occupational pot and you I assume put a wage deduction into your occupational pot some of which made up for your NI saving.

2 The rest of your employers contribution plus the remaining portion of your wage deduction were put into your occupational pot to pay the rest of your occupational pension not funded by the deduction of NI contribution.

Let us assume this is basically factual let's not go into all sorts of detail here. Life is too short.

You have been given two figures in your forecast.

1 The amount of £148.40 less a reasonably true deduction for the amount of the pension that you would get from the deduction that you and your employer received in the NI tariff over you period of work.

The amount you get in the original system which is a lot higher.

So you are moaning here about the circa £80 that will not be deducted from your old style state pension, that you are going to get from your occupational pension when you retire anyway.

I am delighted to be getting what I will be getting from my state pension in a few years time on top of my occupation pension.

What do you think you should get. Would you be happy to get the £148.40 per week from the state and to give back the extra occupational pension you get from your occupational system from the historical NI deduction or are you deserving of both amounts to stop winging!

Yes Sir,

An unsucesssful winge in this case!!!!!!!!!!!!

diablo676

drumtochty wrote: »

What do you think you should get. Would you be happy to get the £148.40 per week from the state and to give back the extra occupational pension you get from your occupational system from the historical NI deduction or are you deserving of both amounts to stop winging!

Yes Sir,

An unsucesssful winge in this case!!!!!!!!!!!!

I think erbaman was complaining, quite rightly in my opinion, that we were fed with false information by the chancellor. It seemed to be a straightforward fact that we would all get £148 if we had the NI contributions.

I bet there are still people who will be voting in the election in May who still hold that opinion.

WillowCat

I thought it was always clear that the flat rate would have contracted out deductions. What I am annoyed about is that these deductions will often put the pension down below the current 'basic' pension which I had always included in my personal planning as my base amount. This won't affect pensioners in the near future as the transitional protection will kick in.

I'm due to retire in 21 years time and I've not yet managed to work out what effect it will have on my pension as my transitional protection will be very low. The reason I will be upset? Well it's been suggested that my entire private pension, including contracted out elements will be given to my ex husband in my divorce, in order I can keep the house I paid for in its entirety. That's another rant though! So I will have a low (very low) state pension, and no private to make up the difference.

SeekTruth

diablo676 wrote: »

I think erbaman was complaining, quite rightly in my opinion, that we were fed with false information by the chancellor. It seemed to be a straightforward fact that we would all get £148 if we had the NI contributions.

I bet there are still people who will be voting in the election in May who still hold that opinion.

Do you have references to where the chancellor said this?

diablo676

SeekTruth wrote: »

Do you have references to where the chancellor said this?

Did you spend a few years in the middle of the jungle? It was all over the press and was on the TV news several times and it got repeated yearly. I think the first time was in 2011 though having been hinted at before. The rate proposed then was £140.

"In the recent Budget, chancellor George Osborne confirmed that the 'unbelievably complex' state pension system currently in place is likely to be replaced with a weekly £140 flat-rate pension."

http://www.moneywise.co.uk/news/2011-04-01/140-week-flat-rate-state-pension-confirmed

This 'simplified' and 'flat rate' pension took a lot of people in.

It looked too good to be true - and for a lot of people it was.

JohnB47

diablo676 wrote: »

Did you spend a few years in the middle of the jungle? It was all over the press and was on the TV news several times and it got repeated yearly. I think the first time was in 2011 though having been hinted at before. The rate proposed then was £140.

"In the recent Budget, chancellor George Osborne confirmed that the 'unbelievably complex' state pension system currently in place is likely to be replaced with a weekly £140 flat-rate pension."

http://www.moneywise.co.uk/news/2011-04-01/140-week-flat-rate-state-pension-confirmed
B
This 'simplified' and 'flat rate' pension took a lot of people in.

It looked too good to be true - and for a lot of people it was.

I too have been watching the media reports on the new pension system. I soon learned that those that were not factually incorrect were misleading by omission of key elements, like the deduction due to years of contracting out. Having said that, I believe that Steve Webb recently admitted that the government could have made things clearer at the early stages - a bit late saying that now of course.

I agree that lots of people are still confused or just plain unaware. I can't seem to convince a friend of mine that I, reaching spa under the new system, won't be any better off than him, retiring under the old. We have roughly the same contributions history.

diablo676

WillowCat wrote: »

I thought it was always clear that the flat rate would have contracted out deductions. What I am annoyed about is that these deductions will often put the pension down below the current 'basic' pension which I had always included in my personal planning as my base amount. This won't affect pensioners in the near future as the transitional protection will kick in.

I'm due to retire in 21 years time and I've not yet managed to work out what effect it will have on my pension as my transitional protection will be very low. The reason I will be upset? Well it's been suggested that my entire private pension, including contracted out elements will be given to my ex husband in my divorce, in order I can keep the house I paid for in its entirety. That's another rant though! So I will have a low (very low) state pension, and no private to make up the difference.

You say "I thought it was always clear that the flat rate would have contracted out deductions." but I don't know where you got that from as the proposals were simply 'back of an envelope' when first announced.

You may have deduced that but I'm sure that millions didn't.

The way that pensions were arrived at was to take the basic pension, which everyone got who had the required NI contribs and then add on whatever the additional SERPS/SP2 elements afterwards. The new way is to say it is £148 and then take off deduct all NI contributions for a large band of years. This has caused confusion for many people I think, or at least those who know about it now - very few people log onto forums like this one and just get the distorted info from the Daily Mail or the Sun.

I am the OP and the chum I spoke about in the first post has now had his written statement. He was contracted out from 1983 until 2000 and then was made redundant at age fifty. His statement says that under the new rules he would get £81 p/w I think - but the old rules apply to him so he gets nearer to £140. In his early life he was a wages clerk though surprisingly still likes to do figures. It seems that the 'excluded years'' are equivalent to about £4.20 p/w for each year.

The contracted out NI contribs (for a range of years) were supposed to pay for the basic state pension but have been declared as totally void in calculation of the new one, or so it seems.

I have no idea what the rules for the transition to the new state pension will be over the next 21 years and neither does anyone else. It will depend on who wins the next three elections I suspect.

Doesn't matter much to me as my private pension is enough anyway, but what of those who were persuaded by sharks to leave the NHS pension scheme after they were encouraged to by someone in power, or others who have a low personal pension?