New state pension

Archergirl

I get my pension in March 16 so the change won't affect me, don't know if I will be better or worse off, but there's nothing I can do about it anyway.

atush

Well it helps if the OP states material facts so you dobnt have to check out their posting history lol/

Anyway, I agree with D. Some people will cash in when they should not.

DancingBadger

Why would someone being paid between 5%-15% a year give up that to get a lump sum (with penalties) to put in the bank to earn 1-3% a year?

To go on holiday, buy a new car and "live a little" - at least, that's what our cleaner and her husband are planning. He's apparently had an annuity since 2008, isn't too impressed with the return on it, and can't wait to get his hands on the lump sum.

These are people who, once they've exhausted whatever lump sum they get from his annuity, will be totally reliant on just the SP and whatever money she earns from cleaning just to keep a roof over their heads. They appear to be just scraping by as it is and it's obvious why a chunk of money is very attractive - especially as they appear to have bought into the "annuities are rubbish; you need to live to 105 to get your money back" hype.

Is there any indication Osborne intends to put in some sort of mandatory advice clause to stop people going into financial freefall? :mad:

le_loup

My butler is much more sensible!

[Deleted User]

I got my pension statement yesterday. I have a maximum 30yr NI, giving me £170.06 under the old system.

The new system gives a max of £148.40 on 35 years NI, so my 30 years will give me £127.20. (148.40*30/35)

As somebody said above, you get the higher of the two, which is £170.05 in my case, so there's no point in my making the extra five years NI contributions for the new system. The £148.40 is still provisional though, so it may be increased before the new system starts in April 2016.

McKneff

My OH and me have private pensions, not a great amount per year but it will stay where it is and pay me and him a bit of pocket money each month.


But I can see the temptation to someone who has no savings or are struggling.

redbuzzard

DancingBadger wrote: »

To go on holiday, buy a new car and "live a little" - at least, that's what our cleaner and her husband are planning. He's apparently had an annuity since 2008, isn't too impressed with the return on it, and can't wait to get his hands on the lump sum.

These are people who, once they've exhausted whatever lump sum they get from his annuity, will be totally reliant on just the SP and whatever money she earns from cleaning just to keep a roof over their heads. They appear to be just scraping by as it is and it's obvious why a chunk of money is very attractive - especially as they appear to have bought into the "annuities are rubbish; you need to live to 105 to get your money back" hype.

Is there any indication Osborne intends to put in some sort of mandatory advice clause to stop people going into financial freefall? :mad:

From a purely financial perspective they are probably being sensible.

I worked out an example a while back, of a single person living in rented accommodation and with only the state pension, housing benefit, and pension credits to support them. If they put enough money in a pension to provide themselves with £100 a week, they came out £10 better off. You can try it yourself with the benefits calculator.

That's exactly what you'd expect of course - benefits are to there to provide for people who need them, not to enhance the income of those who have enough.

But the bottom line is that you need what to many people would be a lot - £100s of 000s - to be materially better off than doing nothing.

The flat rate pension is supposed to help by substituting for pension credits I seem to recall. I don't see it changing that much, but I haven't really got into the numbers.

jem16

atush wrote: »

Well it helps if the OP states material facts so you dobnt have to check out their posting history lol/

True - but I only checked the posting history because the OP said this;

Pobby wrote: »

Firstly if someone is already getting there current state pension, no pension credit, how will they be affected?

Made me think that the OP was already in receipt of a state pension and was hoping for a higher rate from the new state pension without realising that many will never actually get that amount and would be better off (or at least no worse off) under current rules.

xylophone

From a purely financial perspective they are probably being sensible.

I wonder if this will prove to be the case?

If a couple or indeed a single has a low enough income (even with a modest annuity) to qualify for a little means teated benefit, then suddenly acquiring a large ( or large to them) lump sum from selling an annuity might put them over the capital limit.

If the lump sum were blown on a holiday/car / new kitchen etc etc, would they then be poor and not eligible for benefits because of the deprivation of capital rules?

kidmugsy

le_loup wrote: »

My butler is much more sensible!

So is Mr Moribund's scullery maid.