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

smjxm09

...and another thing while I am on a rant. I can pay NI insurance for 42 years and get £113 a week while at the same time Johnny Foreigner from Romania can come over here with his 6 kids, get a low paid job and get more money from the state than me after just 3 months.

bigfreddiel

smjxm09 wrote: »

...and another thing while I am on a rant. I can pay NI insurance for 42 years and get £113 a week while at the same time Johnny Foreigner from Romania can come over here with his 6 kids, get a low paid job and get more money from the state than me after just 3 months.

That's actually totally untrue daily mail claptrap

Cheers fj

bigfreddiel

I predict this will be forgotten by May or June when this forum will be full of moaners banging on about how they've spent all their pension on a holiday, car, new bathroom, new kitchen and now they have no money.

It's going to be all the government's fault. Whatever happened to people taking responsibility for themselves?

Cheers fj

atush

smjxm09 wrote: »

I have just retired and have paid 7 years more NI than is required but because my company contracted me out the government is going to short change me. Now who shall I vote for at the general election?

Is this a DB pension? Or a DC pension

If you were contracted out of a DC pension, instead of getting mad why not find out where your contracted out pot is, and how big it is? And be happy about it?

greenglide

It's going to be all the government's fault. Whatever happened to people taking responsibility for themselves?

Isn't everything always the Government's fault anyway?

smjxm09

atush wrote: »

Is this a DB pension? Or a DC pension

If you were contracted out of a DC pension, instead of getting mad why not find out where your contracted out pot is, and how big it is? And be happy about it?

Up until 2009 it was a final salary pension. From 2009 my company started a new pension scheme which was career average earnings from 2009. My company pension payout has not changed because it was contracted out for many years because it was a final salary pension when contracting out took place.

My moan is that my company pension is the same whether I was contracted in or out. I am not getting a bigger pension because I was contracted out but I will get a smaller state pension.

Andy_L

Since you were contracted out you and your employwr paid lower NI, thus subsidising the cost of your DB scheme.

hugheskevi

My moan is that my company pension is the same whether I was contracted in or out. I am not getting a bigger pension because I was contracted out but I will get a smaller state pension.

Your employer saved on their employer contributions (c3-4 percentage points lower) by operating a contracted-out scheme. Those savings went somewhere - in a competitive labour market at least some of it may well have gone into other components of your remuneration package (perhaps a higher salary, alternatively perhaps it funded a superior accrual rate in the pension than would otherwise have been the case, and so forth).

You also contributed lower employee National Insurance contributions due to being contracted-out.

The status-quo would have been the Government making no changes at all to the system, and you would have presumably been content to receive the pension you had accumulated from your contributions and would not be moaning.

The system has been changed, but you are no worse off than you were before the change. Your complaint is that you have not had a wind-fall gain which some others may receive (probably not too many though, lifetime self-employed and women with partial contribution records would probably be the biggest gainers out of those reaching State Pension age in 2016). Meanwhile all younger workers now have a much lower expected pension. It is surely those folk - who have actually lost what they may have expected, rather than not gaining what some of their peers may have gained - that should be moaning about the change?

I am not sure why you think you deserve to receive a higher pension than the one you contributed toward, when you and your employer have contributed less in return for a lower pension? Why should others pay more tax to fund a windfall gain which 4 years ago you could not reasonably have expected to receive?

hyubh

smjxm09 wrote: »

Up until 2009 it was a final salary pension. From 2009 my company started a new pension scheme which was career average earnings from 2009. My company pension payout has not changed because it was contracted out for many years because it was a final salary pension when contracting out took place.

You're looking at things the wrong way. Private sector DB schemes still open to future accrual are being allowed to reduce benefits to take account of the fact that contracting out is being abolished. If the 'flat rate' state pension were to be applied retrospectively, then both you and your employer would be facing a big NI bill and your occupational pension would be up for a corresponding hit.

My moan is that my company pension is the same whether I was contracted in or out. I am not getting a bigger pension because I was contracted out but I will get a smaller state pension.

The horror, you were contracted out of a state-run earnings-related pension scheme intended as a substitute for a (typically superior) company-run earnings-related pension that you did (and do) actually enjoy...

jamesd

smjxm09 wrote: »

My moan is that my company pension is the same whether I was contracted in or out. I am not getting a bigger pension because I was contracted out but I will get a smaller state pension.

Who do you think would have had to pay for your higher company pension if the pension wasn't getting the money from your being contracted out? That money has to come from somewhere so it would have come in reduced pension, more from you or lower pay increases for you.

The company is required by law to pay you at least as much as you would have received from the contracted out money for the part funded by the contracted out payments into it. You aren't going to lose, just have a different place paying the money. In practice most company schemes end up paying more anyway, so you probably are better off.

It's not clear whether you have reached state pension yet or will do so after the flat rate comes in. If you say more about this it would be possible to tell you more about other options applicable to you, like deferring the state pensions or buying more state pension.