MSE News: Only 45% of those retiring to get full 'single-tier' state pension

greenglide

they can also buy extra SP, although the details aren't completely set yet?

Extra SP bought with Class 3a contributions is only available to people with an SPa date of before 6/4/2016.

pearl123

They keep moving the goal post. They should allow everyone the opportunity to add more years. At the moment you can add years but it can (I believe) not go too far back. It has to be recent years.

JezR

So MSE puts out something from the Press Association without any kind of critical review, and seems to have originated initially via an initiative of Hargreaves Lansdown, which have their own interests in this area.

As to what Steve Webb has said in the past, how about this from 2011, right back at the Green Paper stage:

Mr Webb said that during a 'transitional period' some pensioners would receive less than £140 'directly from the state pension'; the rest coming from existing top-ups.

The number of pensioners currently eligible for pension credit is around 45%. Under the old scheme this was estimated to still be 30% by 2050. Much of this comes from a lack of contribution years which won't change radically overnight but will over time.

The Green Paper language was rather more explicit that for existing people the single tier pension would be delivered "through a combination of their state pension and contracted-out pension scheme, as happens now". This emphasis seems to have disappeared along the way, possibly with the mechanism of the transition being established.

Reaper

I'm contracted out so I will get much less than the headline state pension. However I gather I will be able to earn some of it back it back though NI contributions if I keep working beyond April 2016.

Do we know yet how much can be recovered for each year of employment? I have seen a £4.20pw figure mentioned but I'm not sure if that's official or a guess.

molerat

You will accrue 1/35th of the NSP per year worked so based on the current proposed figure of around £148 then around £4.23. You will only be able to add up to the £148 figure.

greenglide

So the Government produced legislation which the press (including radio, TV, MSE etc) failed, as usual, to read and feed to the masses. The "blame" for this, surely, rests with the Government (they should have tried harder), the press (for not explaining it better) and the man in the street for grabbing the words that are best for them.

We seem to get the press that many people deserve (for the worse).

JezR

Part of the problem has been the widespread sloppy use of the term 'flat rate' rather than 'single tier'. This carries the implication everyone gets the same automatically when the reach SPA. This is not the language used on gov.uk etc, but who reads that ....

"Not everyone will get the full new State Pension, it will depend on your National Insurance record." - Your State Pension
Explained. Indeed it says this twice, to make sure you get the message.

Doc_N

dunstonh wrote: »

This is stating the obvious and was known about years ago.

It might be obvious to someone like you, describing himself as a Financial Adviser - but it certainly isn't obvious to the very large number of people who have been conned by this Tory-led government into thinking that they'll be getting the full £148.40.

This is yet another example of a government pulling the wool over the eyes of voters, kidding them into thinking that they've been given something they haven't been given at all.

Rather like the NHS, which is falling to pieces, with the Conservatives claiming that it's nothing to do with them.

Who do they think they're kidding?

greenglide

Unfortunately the politicians used the term "flat rate" in the early days.

It sort of is a "single tier" and it sort of is a "flat rate" but people get a sliding scale of the "flat rate".

Of course the present system has a Basic Pension that is a "flat rate" which individuals have 1 to 30ths entitlement depending on the contributions!

greenglide

It might be obvious to someone like you, describing himself as a Financial Adviser - but it certainly isn't obvious to the very large number of people who have been conned by this Tory-led government into thinking that they'll be getting the full £148.40.

But the opposition was in on the "conspiracy" as well.

This had all party support. Do you think a Labour government would have explained it any better?

What, exactly, would it have taken for the masses to understand this?