State pension,old and new

roddydogs

molerat wrote: »

Under the new system you can receive a maximum of £148 for 35 years contributions, under the old system you can receive £276 with 30 years contributions. Who did you say is worse off ?

Who, exactly gets £276 PW Basic state pension for 30 yrs?

redux

The people whingeing about the adverse effect of being contracted out ought to think about and explain where that money has gone.

You've paid less into the state scheme, and more into your own scheme.

If you're disappointed with the result, you'd better address your complaint about theft or poor performance to your pension scheme provider, not the government.

I suppose there may hypothetically be a few people for whom the contracted out amount is the only contribution to their own private or employer scheme, but I'm sure I can remember reading financial advisers warning against such complacency years ago, so it might be interesting to hear a direct comparison, but I'd be surprised if anyone would try to allege misselling.

bowlhead99

Froglet wrote: »

I am beginning to wish I had never asked.Just thought it would be good to get some clarification from those in the know.Not be accused of envy and resentment for heaven's sake.Those sort of comments are unneccesary.

You are missing the point and people aren't accusing you of envy.

You asked if your husband was losing out by retiring 'too soon'. As people confirmed, the reason he will get a low amount of money is because he was opted out of making contributions for so long. If he had been making contributions at full whack, he would get a state second pension / earnings related top up or whatever you call it, and be on a higher overall figure. Instead he didn't pay the full national insurance that others did, and instead had money diverted into his employer pension which will pay out a healthy amount all through retirement. So it would be unreasonable for him to also get £140+ of state pension.

As people confirmed, if he had retired on the new scheme instead he would have had a reduction for all that opting out. So he is not losing by retiring on a different date. As jamesd and others mentioned, actually there are some good benefits of retiring under the old rules, like the more lucrative deferral scheme which is very expensive for the government and is not going to continue at the current level. So, nothing to worry about re you husband.

roddydogs wrote: »

How they can say that someone on the "Old" system will not be any worse off baffles me. I had to do 39 years for £108, now its less for £144, how is that "No worse off"?

This was what people were responding to with the stuff about coveting. The person moaning that they 'only' got £108 while they believed others would be getting more. As with the explanation about your husband, the reason someone would 'only' be on £108 (same as one of my parents) is if they had no top up from the state second pension because they didn't actually pay into it like the rest of us who did (if we are taking £144 after 35 years) and instead have an entirely separate lucrative alternative pension from an employer. If they had paid more NI they would be getting more than £108 now.

roddydogs wrote: »

Who, exactly gets £276 PW Basic state pension for 30 yrs?

Nobody said that is the basic amount. It depends what you have paid in. You can be getting over £160 a week in state second pension (linked to your earnings/ NI contributions over the years) on top of your £108, if you were actually paying in the full amount of NI that goes with your salary without contracting out. http://www.which.co.uk/money/retirement/guides/state-pension-explained/state-second-pension-and-serps/

As you have paid in just the basic amount and contracted out, you are not going to see any of that. While if I was not contracting out and was paying NI on thousands and thousands of pounds of salary, I would have been able to access this second pension/serps money - under the current system. Now the serps is being disbanded with the move to the new scheme I will be a net loser, potentially (I will not reach retirement for 20+ years anyway), as high earning high contributing people will not be able to get so much from the state, although there is an element of protection for the second-pension element I have already 'earned' to date.

The new rules are better for some people than others. But people who already retired on 'only' £108 basic because of contracting out, and an employer system on the side, have not been screwed over. The new system would not have magically given them more cash for retiring next summer instead of last summer.

Froglet

"You asked if your husband was losing out by retiring 'too soon'. As people confirmed, the reason he will get a low amount of money is because he was opted out of making contributions for so long. If he had been making contributions at full whack, he would get a state second pension / earnings related top up or whatever you call it, and be on a higher overall figure. Instead he didn't pay the full national insurance that others did, and instead had money diverted into his employer pension which will pay out a healthy amount all through retirement. So it would be unreasonable for him to also get £140+ of state pension.

As people confirmed, if he had retired on the new scheme instead he would have had a reduction for all that opting out. So he is not losing by retiring on a different date. As jamesd and others mentioned, actually there are some good benefits of retiring under the old rules, like the more lucrative deferral scheme which is very expensive for the government and is not going to continue at the current level. So, nothing to worry about re you husband."


Thank you Bowlhead.I know he hasn't lost by contracting out,i was just after some clarification about whether the new rate was better than the old and it seems it wouldn't have made any difference.So that's good,and especially as you say it gives us the option to defer for a better percentage rate.

roddydogs

Im talking someone who is 100% contracted out, will get more from the BSP when the "New" system comes in than someone who has already retired . Yes or no?

jem16

roddydogs wrote: »

Im talking someone who is 100% contracted out, will get more from the BSP when the "New" system comes in than someone who has already retired . Yes or no?

No.

They would actually get far less but because of the transition arrangements they will get exactly the same.

GunJack

It really annoys me that something as important as a pension is subject to stupidly-complex rules, and that goes for state, company and personal varieties

greenglide

GunJack wrote: »

It really annoys me that something as important as a pension is subject to stupidly-complex rules, and that goes for state, company and personal varieties

But as soon there is anything other than "everybody gets the same, no matter what, with absolutely no exceptions" then there has to be rules. As times change the rules get more and more complex because of what has gone before.

The only complexity around nSP is the transitional protection (Starting Amounts etc). The could have a omitted that so that everybody achieving SPa after 5/4/2016 got the new rules - 35 years gets you the nSP max, nobody gets more than that irrespective of what they have accumulated before that, people who had been contracted out all their working life would suddenly get the maximum nSP amount?

Does that work? No.

Could it be done better? It could certainly be done differently.

GunJack

greenglide wrote: »

But as soon there is anything other than "everybody gets the same, no matter what, with absolutely no exceptions" then there has to be rules. As times change the rules get more and more complex because of what has gone before.

The only complexity around nSP is the transitional protection (Starting Amounts etc). The could have a omitted that so that everybody achieving SPa after 5/4/2016 got the new rules - 35 years gets you the nSP max, nobody gets more than that irrespective of what they have accumulated before that, people who had been contracted out all their working life would suddenly get the maximum nSP amount?

Does that work? No.

Could it be done better? It could certainly be done differently.

I think you misunderstood - I'm not saying there shouldn't be rules, but successive governments have played around and now we have over-complex rules (and terminology to go with them).

molerat

roddydogs wrote: »

Im talking someone who is 100% contracted out, will get more from the BSP when the "New" system comes in than someone who has already retired . Yes or no?

No. I was contracted out for 32 of my 39 years contributions. As I posted above, under the new scheme I would receive £75.33 due to the contracted out deduction. The old scheme figure, which I will receive due to the transitional "no worse off than you would have been" protection is £129.91 which is inclusive of a reduction for contracting out. MrsM on the other hand will gain due to never having contracted out. She has 27 years, mainly due to HRP, + 26p Grad giving £102.05 under the old scheme. Under the new scheme she is a winner getting £114.48. Those who were never contracted out and only receive the basic amount currently have the protection of pension credits which under the new scheme is being replaced by the higher pension amount.