State pension estimates for 2016 +

greenglide

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?

People who were badly advised to transfer out of DB schemes in the 80s and 90s should have been contacted in the late 90s and the situation "should" have been resolved.

Anyone who has a "low" personal pension would have a low Rebate Derived Amount so any deduction from the new rules amount would be very small. If the personal pension was "low" because the member wasnt contracted out for long then there would be AP accrued which would give a better old rules amount.

The situation, at present, once the transitional arrangements unwind is quite simple - one year of NI contributions gives 1/35th of the standard ST amount subject to a minimum of 10 years contributions.

The target is quite simple, the transition isnt but it is fully documented. The people who latch onto soundbytes and only see the headlines wouldnt have seen the details behind the old system either.

uk1

We struggled with the online system. Should have been a doddle as we've both been registered for Gateway since it started and use it for tax returns etc. Kept telling me that it won't deal with me and to telephone. So we sent a written request through the post.

We applied for pension forecasts for both of us. My wife is past her state pension retirement age but was hoping for a statement confirming what it would be if retiring today and the annual increases. I remember our last statement use to have this tytpe of projection. We just wanted confirmation of what we think it should be so they'd be no surprises that couldn't be ironed out now.

She received a letter from them stating she couldn't have a forecast because she should have already taken her pension. She was told that she should contact them to arrange to take it. Evidently a statement of her current situation isn't possible. Don't see why they can't produce a statement for her. Not rocket science.

Still waiting for mine.

greenglide

Evidently a statement of her current situation isn't possible. Don't see why they can't produce a statement for her. Not rocket science.

But it has never done this has it?

When on-line pension forecasts where first brought in the present method of deferrals wasn't in place and "nobody" deferred. Nowadays many more people do this but the level of benefit is much easier to calculate.

Government departments don't do maintenance of computer systems very well - the "system owner" will have been different to the owner of the systems being changed for this and wouldnt have wanted to pay for the changes.

xylophone

She was told that she should contact them to arrange to take it. Evidently a statement of her current situation isn't possible.

I don't understand why she has been told that she has to arrange to take it. She can choose to defer?

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/372517/dwp024-102014.pdf

johnaka

it seems that the Government has mislead us all.
I to thought we were going to get £140/£150 aweek.no mention of contracted out.
so if a person like myself who had worked for 41 years and paid full NI.
how do they work out the contracted out.
I contracted out around 1983 on advice of course till 2009.
so that is 26 years of contracted out.
the government has conveniently reduce the amount of years you are required 35.
26 years contracted out on 35 years or 41 years.
I'm self employed due to retire in nove 2016.
my last 2 pension statement( based on old state pension).
2006...
basic state pension £82.05
additional state pension £31.68.
_______
£113.73

2008
basic state pension £90.70
additional state pension £28.99
graduated retirement benefit £3.18 I like to know where this come from??
______
£122.87

2014/15 state pension is £113.10
so going by above I should at least get £156.
but as you all know the old wont apply in 2016.
so it looks like I'll be losing out judging by what others said.

jem16

johnaka wrote: »

2014/15 state pension is £113.10
so going by above I should at least get £156.
but as you all know the old wont apply in 2016.
so it looks like I'll be losing out judging by what others said.

No you won't lose out. You will get the higher of the 2 calculations so, if under the current rules you will get £156, that's what you will get.

xylophone

Re Graduated Retirement Benefit
http://www.rights4seniors.net/content/other-state-pension-payments

jamesd

uk1 wrote: »

My wife is past her state pension retirement age but was hoping for a statement confirming what it would be if retiring today and the annual increases. ... She received a letter from them stating she couldn't have a forecast because she should have already taken her pension. She was told that she should contact them to arrange to take it. Evidently a statement of her current situation isn't possible. Don't see why they can't produce a statement for her.

She might try phoning them to explain what she wants and why. They might be able to tell her her original entitlement without the increases from deferring and that would allow calculating that.

Of course it's wrong to simply tell her to claim it now, since deferring is a valuable option. If she wants to continue to defer she can and should refrain from claiming.

greenglide

Of course it's wrong to simply tell her to claim it now, since deferring is a valuable option. If she wants to continue to defer she can and should refrain from claiming.

The pension forecast people (the future pensions people) almost certainly don't have access to the IT to tell them how much someone who has deferred would get if they claimed now. You would need to go down the claim process and then tell them you wanted to defer.

I am sure it would be better if they required you to make the claim, establish entitlement and then defer so that you would know the exact value of the pension that was deferred.

jamesd

johnaka wrote: »

I to thought we were going to get £140/£150 aweek.no mention of contracted out.

That was mentioned very early on, probably just something you missed in the flood of news.

johnaka wrote: »

the government has conveniently reduce the amount of years you are required 35.

The current requirement to get a full basic state pension is 30 years. Those receiving PAYE income also get additional state pension based on their contracted in NI payments, if any, with no cap on the number of years. This means that the current maximum for a non-deferred state pension is around £250 a week for a long term high earner who never contracted out.

The flat rate system eliminates the earnings-relate additional state pension and instead introduces a flat rate with a cap of £155 or so (not yet known, was around £144 when originally announced, the 155 number is allowing for inflation increases to that). A person who worked their whole life under the flat rate system would reach that after 35 years and that is where the 35 years that you have read about comes from.

At the start of the flat rate system each person will have a foundation amount calculated which is the higher of their entitlements under the current and flat rate systems. Any additional years of contributions paid under the flat rate system will add 1/35 of the flat rate £155 or so cap until they reach that flat rate cap. A person who has a foundation amount higher than the flat rate cap will get that higher foundation amount.

Graduated retirement benefit is from NI before SERPS was introduced. From SERPS through the current S2P system the contracted in amounts are instead included in the additional state pension number.

Here's how the contracted out deduction works for various date ranges:

From 1978/79-1996/97: there was a guaranteed minimum pension for those who contracted out. This GMP will be calculated and used as the contracted out deduction for these years.
From 1997/98-2001/02: no Additional State Pension was added so there is no contracted out deduction for time contracted out during these five years.
From 2002/03-flat rate: a similar calculation to the 1978/79-1996/97 calculation is used to get a contracted out deduction.

Since you were contracted out from 1983 through 2009 you'll get some of each of these treatments and should assume that the deduction will reduce your additional state pension entitlement under current rules. My expectation is that it will eliminate all of it and maybe more.

Due to the long contracted out time I also don't know how much you'll get under the new rules because I don't know the amount of your contracted out deduction. Best I can suggest is wait until foundation amount calculations are available, then ask for your calculation details.

Since you're planning to retire in November 2016 you'll get at least some increase over that amount, since it's certain that your foundation amount will be below the flat rate cap.

You appear to be in the group of those who were contracted out who won't gain or not much under the flat rate rules, because you're so close to reaching your state pension age. Those with longer to go would get their full contracted out pension pot and also the full flat rate, after working enough years extra to get to the flat rate cap. In between are those who won't have enough years to get to the full flat rate so don't effectively get both the benefit of contracting out and the full flat rate, just part of it.