"Flat rate" state pensions - deception exposed

greenglide

redux wrote: »

Not affording to the letter I received.

£113.10 plus an additional £6.94 from some employment years ago. Based on 33 years so far (30 years is the current threshold, about to increase to 35).

So someone similar but a bit older than me, without any additional pension, would not catch up the difference to the new pension in 8 more years, and might not have that long.

Someone who has 33 years so far and has never been contracted out will get 33 / 35 of the full nSP rate. With another two years before it comes in that would get the full nSP rate.

So actually better than the old system.

DaveMcG

diablo676 wrote: »

"Steve Webb, the pensions minister, admitted he may have "oversimplified" the new state pension to make it more palatable to older workers.
“I think I may have been guilty of oversimplifying the new flat rate state pension,” Mr Webb told this newspaper. “But as soon as you caveat this type of thing people switch off. "

That comment says everything about Webb. The claims culture means that the slightest ambiguity by an adviser or product provider carries huge risks and he thinks that ensuring clarity doesn't matter....

greenglide

frank777 wrote: »

If they gave an estimate based on this, there would be no issues (unless their records are incorrect) Do I have to keep logging in every month and check if my statement has been updated - my state pension is due in 2017.

And when the Online Pension Forecasting system is updated for nSP you will be able to do that.

Providing you are in the age range they are covering you can ask for one by phone or by filling in the request form (BR19?).

redux

greenglide wrote: »

Someone who has 33 years so far and has never been contracted out will get 33 / 35 of the full nSP rate. With another two years before it comes in that would get the full nSP rate.

So actually better than the old system.

That is not what the letter says.

Although on the phone they express caution that parts of the calculation are based on things that will change, it clearly says that the contributions so far will give a proportion of the basic state pension of £113.10 per week, and then on transfer to the new system each further year will add £4.24

It's not only in a letter. The government website has similar, with worked examples.

redux

DaveMcG wrote: »

That comment says everything about Webb. The claims culture means that the slightest ambiguity by an adviser or product provider carries huge risks and he thinks that ensuring clarity doesn't matter....

So does this, from the Telegraph article:

“I have no interest in people not getting what they expect. When I’ve spoken about
new state pension before, I’ve focused on the longer-term, as eventually everyone
will get the full single-tier if they have 35 years of national insurance contributions.
For example, my son starts work in a few years time and he will get the flat-rate,
that’s it.

“In the meantime, some people will get more and others less than the full single-
tier amount.”

Those people getting less than the full amount might include someone currently aged 62 or 63, with possibly over 45 years contributions, and about to add a couple more.

In other words Webb has produced a scheme for the long term, but could not be too bothered with enough attention to detail to ensure that people in the transitional period would be OK.

molerat

No one will lose what they have already got, many will not get what they would have got if the old system continued, some will be better off.

My statement shows me, being contracted out for most of my working life, as having £130 old and £75 under the new scheme so I will start with the £130 and be able to add another 4 - 5 years to come up to the full new.

Mrs M has 27 years + a little additional so has £102 under the old, £114 new so is a winner from the outset and will be able to add more.

The problem is that many only looked at the headline without investigating for themselves, probably the women who still think they are getting their pension at 60 - yes they are still out there - and men at 65.

redux

I just phoned up, to discuss a letter sent to me on 23 December, and was surprised that the first person could find no record of a letter having been sent recently.

I wanted to check first that although the current calculation is based on out of 30 years, would the starting amount transfer in April 2016 be based on out of 30 or 35.

35, it appears, but that was the second person telling me, as the first couldn't grasp what I meant and couldn't access my record either.

That starting amount transfer is based on the basic of £113.10 plus any additional.

On transfer, someone will get the better of two calculations, one of which is that, and the other may be related to the new state pension but also contracted in and out history, so maybe greenglide is also right, but I may have not quite followed that part of the explanation.

Then they accrue at £4.24 per week.

jamesd

You've followed it reasonably well. Just search this section for the phrase foundation amount to find out more about how it works.

greenglide

I wanted to check first that although the current calculation is based on out of 30 years, would the starting amount transfer in April 2016 be based on out of 30 or 35.

35, it appears, but that was the second person telling me, as the first couldn't grasp what I meant and couldn't access my record either.

That starting amount transfer is based on the basic of £113.10 plus any additional.

The starting amount is based on the higher of the old rules calculation using 30 years or the new rules based on 35 years. The new rules figure also has the "Rebate Derived Amount" taken off it. It is this deduction for people who have been contracted out that ends up with them having, generally, a larger old rules figure if the have 30 years or more.

It is what it is.

frank777

greenglide wrote: »

And when the Online Pension Forecasting system is updated for nSP you will be able to do that.

Providing you are in the age range they are covering you can ask for one by phone or by filling in the request form (BR19?).

Current guidance for FORM BR19
The amount of State Pension that will be shown in your statement will not be based on the new rules. It will be based on the law if you were to reach your State Pension age today. The information in your statement is still relevant because, in the vast majority of cases, this existing scheme estimate will be the least amount that someone will get when they reach state Pension age.

So I keep logging on for any updates - Online Pension Forecasting system is updated - & don't waste my time filling in FORM BR19 or money phoning them up! Unless I see any different on this website or the government give out any updates.