Pension Forecast - New "Flat rate" rules vs Existing rules.

carter91

I'm due to draw my state pension from Sept 2018, so thought I'd get a SP forecast. I have 38 qualifying years.

Under the new scheme £69 a week; under the existing scheme £139 a week.
I will be happy with the £139 (alongside my Occupational Pension), but am bemused by the "flat rate" political tag given to the new scheme

The new scheme seems much more affected by any contracted out periods.
How does this sit with the government's rheotric that you will in future get the direct benefit of any personal / employer contributions. (Rather than it not increasing your total retirement income, if it doesn't take you above the pension credit eligibilty -- PC -.£148; SP - £113).

Will people enrolled into the workplace scheme, be treated as contracted out and find reductions to their SP when they eventually draw it?

Somehow the new scheme doesn't quite fit the expectations given to it by the government!

JezR

Contracting out is abolished completely with the new pension so won't become a consideration beyond calculation of the foundation value based on past contribution record. Those with years to go to retirement will accrue years under the flat rate scheme until they reach the full pension, if they aren't already there.

drumtochty

As it is common knowledge that when a politician speaks it is at best a lie.

Your complaint seems to be around listening to proffessional liars who are not telling the truth!

The new state pension really comes into proper operation for those in early to mid forties.

That is why you will get the higher of the old and new system from 2016.

Assuming you are working up to your state retirement date and depending on your salary you will get two more years of SSP so from £3.50 to £7.00 a week and two years of the new state pension about £8.48 per week. All plus inflation

Therefore you will max out at the present illustrative amount of £148.40 on you 64th birthday.

That is assuming you are not still in a contracted out scheme like a final salary pension where you get the SSP amount from your occupational scheme.

As another poster has advised the new pensions that employers have to enrol staff into are not contracted out so your thoughts on these causeing state pension loss are invalid.

greenglide

The new State Pension is a "Single Tier" "not a Flat Rate".

The multiple tiers of the old scheme go but there is still variation depending on number of qualifying years.