MSE News: David Cameron - We will give pensioners security and dignity

jem16

DeepsBilly wrote: »

In addition my wife works for the local government and transfered a personal pension into her employers pension scheme to buy additional years. This pension scheme is now also changing its retirement age for full pension along with UK Gov guidlines. So she has been shafted from both directions along with millions of other baby boomers. Rememebr we are the generation of voters!

As your wife is 60, she will stay on the current LGPS as she has full protection being within 10 years of Normal retirement Age. She will be able to retire from the LGPS as she expected as nothing has changed for her.

http://lgps2014.org/content/government-said-there-would-be-10-years-protection-those-nearing-retirement-i%E2%80%99m-within-10

Perhaps educate yourself on the facts before making accusations.

JezR

Removing differential state pension ages had been under discussion on and off since the 1950s, although during at least some of that time it was hoped that could be done at least in part by a lowering of the man's age.

The reduction to 60 in 1940 related to specific circumstances concerning how the limited benefits system worked at that time, pre-dating National Insurance, when the insured old age pension was only paid to people who had earned less than £250 in the previous five years before retirement. Others needed to apply to their local authority (and later the Assistance Board) for means tested relief. At that time very few women were insured in their own right under the system.

jamesd

trudger wrote: »

Because we have £1000 pounds savings between over the amount allowed {£10,000} we are having £2 deducted from our pension credit per week.They tell me that is the interest rate they calculate it at {£1 per £500 per week}. I have asked were on earth I could possibly get this rate but no answer seems forthcoming.

Two ways to get that 5.2%, the first lower risk:

1. The Invesco Perpetual Distribution fund, held in a stocks and shares ISA, pays about that rate. The payments are monthly but not equal amounts each month. As an investment, the capital value will vary up and down and so can the interest paid. Sales are normally possible every working day but it may take longer for an executor to get the money.

2. Peer to peer investments via the relatively new firm Ablrate. You'd probably be able to get around 10% taxable from this. There is a change of capital loss and a range of other risks but overall I think it is a good deal. It is not guaranteed that an investment here can be sold quickly but it is likely.

In addition there are:

3. The Santander 123 account. This has a £2 a month charge but pays you money on bills paid via them using direct debit, the amount depends on the bill, not taxable. It pays 3% interest for the amount you have in the account, taxable.

4. The TSB Classic Plus account pays 5% taxable on up to £2,000 in the account.

Using those and others combined you should have no difficulty matching the income expectation over a year without undue overall risk level.

jamesd

pillarrock wrote: »

As a current pensioner who has the maximum National Insurance contributions plus additional state pension (SERPS, GRP etc) I will still receive less than that amount. The new State Pension minimum should apply to ALL pensioners!

This implies that you either contracted out into a personal pension or were in a work pension that was contracted out. In the first case you have your other pension pot and/or the income from it. In the second, the deal was that your workplace pension would pay the difference and usually more, in exchange for getting the NI rebates. Either way you're really asking to have two bites at the cake for the same amount paid by you in NI.

If you want a flat rate for existing retirees, that would be unfair on the other pensioners. The system when you paid in was that there would be an income-related part and that is what current retirees get. To make it flat rate would imply taking money from the existing pensioners who are getting more than the flat rate to give it to those who aren't. That is not fair to them when they paid in on the basis of having a state pension related to their earnings. The flat rate eliminates the earnings-related part and for years under the flat rate system does take this money from the earnings-related part so it can be paid to those entitled to less. Those paying NI under the flat rate will know this and can plan their retirement income accordingly, relying on less from the state due to no earnings-related part.

jamesd

Del333 wrote: »

I was born in 1955 and will be 60 next year ...
I also received a pension prediction stating I would be entitled to £113 per week, how does that work then compared to his statement of £148.40 per week.

The projection would have been based on current rules, not flat rate rules. When the flat rate comes in you will get a foundation amount entitlement that is the higher of the current rules amount or the flat rate amount. Then future years of working will increase your state pension by 1/35 of the flat rate for each year worked until you reach the flat rate level or stop working. I'm assuming that you will not be in a contracted out workplace pension after the flat rate comes in.

Del333 wrote: »

I have never been unemployed, never been off work and never claimed benefits there's something wrong somewhere and then he expects us to believe him.

This implies that you have always worked in a contracted out workplace pension scheme. Those pension schemes are required by law to use the rebate money they received to at least match what the current rules state pension would have paid if the money hadn't been used for contracting out. So you get the money, it's just that it comes from the former employers rather than the state pension system.

It's very likely that you have claimed something paid for by NI, It funds the NHS so unless you've never registered with a GP and never received NHS treatment you have received something other than the state pension for your NI payments.

mgdavid

pillarrock wrote: »

It is not right that people only qualify for the new State Pension minimum of £148.40 if they were born after the specified dates for men/women. People born earlier should also get at least that amount. As a current pensioner who has the maximum National Insurance contributions plus additional state pension (SERPS, GRP etc) I will still receive less than that amount. The new State Pension minimum should apply to ALL pensioners!

They do; Pension Credit tops up SP to £148 - unless the individual has private pensions or substantial savings, in which case they neither need nor deserve state benefits.

hanlou007

on the gov site for calculate my state pension , messing around with DOB's and contributions i can never get it above £113........
if i stop working maybe i can get it to go up??? :rotfl:

patanne

But surely all that site can tell you is if you have made enough contributions to entitle you to a full state pension, which you have, and that is currently £113.10. The only way that is going to be all you get is if you have always been contracted out. If that is the case then your employment pension will reflect the lower NI you have paid which should have gone into your employment pension, as you & your employer made savings.

ebjb

jamesd wrote: »

Such a person who put money away for their retirement has the option of deferring their state pension, even if they have already started to take it, and getting an increase of 1% for each five weeks of deferral. This is roughly twice the gain that a person in the flat rate system would get from the same deferral time. They will also starting late in 2015 have the option of buying more state pension. This option is not available to those who reach state pension age under the new system.

A low paid person who worked a full working life as an employee under the old rules would get a combined basic state pension, additional state pension and graduated retirement benefit of about £190 a week under current rules, up to £250 or so for a high earner, whether that's one high paid job or working lots of hours.

To get less than the flat rate would mean not working as an employee full time for much of a working life. There are many reasons that could apply to someone, including choosing not to work, perhaps as a house husband whether raising children or not, long periods of inability to work or unemployment, being self-employed or spending a long time in prison. For most of these cases credits to the basic state pension would be made, but not to the additional state pension that would raise the total above the flat rate level. That is as the current UK system is designed to work, as a basic state pension with private top up decided by each individual person and additional means testing to help those who for some reason ended up not getting a basic living income. The flat rate takes money from the NI contributions of workers on low and higher incomes and uses that to get the low workers above the means tested benefit level, replacing the general taxation used for means tested retirement benefits. Effectively a stealth tax rise, reducing what is paid for out of taxation and replacing it with money taken from NI benefits.

WHERE on earth are you getting this information from james d ? My husband worked for 50 years from age 15 until age 65 - low paid but paid full national insurance contributions all these years, and now at age 67 gets the grand (?) sum of £144.17p per week state pension (not the £190 you have quoted for a low earner) Now under the new rules you only have to work 30 years to get the new basic rate which is MORE than my husband's £144.17p - where is the fairness in that I would ask Mr Cameron? It's a disgrace that pensioners who worked all these extra years will be getting less on the old rules than those on the new rules. We saved for our retirement but all our savings mean nothing with the interest rates so low and in any case our savings will be eaten up in care costs if we have to go into care when we are older. Those who spend their money throughout their lives get free care paid for by the council. If we had our time over we wouldn't save for our retirement, but spend every penny. That way we would get extra help in our old age. These new rules for pensioners are a slap in the face for present pensioners and David Cameron should be ashamed of himself.

RobStaffs

I have read a few references to how contracting in/out of SERPS impacts on your final pension. I am still a bit confused. I am 50 years old and have always worked. So I make that about 34 years in continuous employment. I worked for the COOP between 85-95 and at that time I think we where given the option of opting out of SERPS. From 95 to date is been straightforward NI contributions with a personal pension plus company contributions. Will I qualify for the state pension of £148 pension on retirement?