Pension changes 2016

roy_c

I really don't understand all this and it is very relevant to my situation..
I'm now 57 and will be retiring in April 2016 after having been in a contracted out final salary scheme. I was also in the Civil Service from 16 - 18 two years. This means I'll have 16 years full NI contributions plus 24 at the lower rate but I have worked out I will only get a SP of £67.84 Have I got that right as I now may have to put off my early retirement to build up my SP.

bigfreddiel

webbit wrote: »

tory stealth tax, and you need 30 years contracted in to get the full "new" state pension

How's that a stealth tax? You're only getting what you've paid for!

If you were contracted out then you have been investing the difference in ni payments in your own pension instead which your contracted in person hasn't thus his or her higher state pension.

Cheers fj

bigfreddiel

roy_c wrote: »

I really don't understand all this and it is very relevant to my situation..
I'm now 57 and will be retiring in April 2016 after having been in a contracted out final salary scheme. I was also in the Civil Service from 16 - 18 two years. This means I'll have 16 years full NI contributions plus 24 at the lower rate but I have worked out I will only get a SP of £67.84 Have I got that right as I now may have to put off my early retirement to build up my SP.

If you are now 57, and retire next April you will be 58. The state pension age is 65 for men and somewhat less for women, so you are quite a few years short of receiving your state pension.

Hope that helps

fj

roy_c

bigfreddiel wrote: »

How's that a stealth tax? You're only getting what you've paid for!

If you were contracted out then you have been investing the difference in ni payments in your own pension instead which your contracted in person hasn't thus his or her higher state pension.

Cheers fj

Surely you should have been given the option instead of being mislead and robbed.

atush

webbit wrote: »

tory stealth tax, and you need 30 years contracted in to get the full "new" state pension

Sorry, but no, wrong again. I am guessing you didn't get a maths o level?

With 30 years you will not get a full new SP.

You will need a min of 35 years after april 2016, and you need to have been (or be in future) contracted in.

You only need (if retiring today ) 30 years to get a full basic SP, and you get more on top if you have been paying SERPS/S2P etc alongside.

atush

roy_c wrote: »

I really don't understand all this and it is very relevant to my situation..
I'm now 57 and will be retiring in April 2016 after having been in a contracted out final salary scheme. I was also in the Civil Service from 16 - 18 two years. This means I'll have 16 years full NI contributions plus 24 at the lower rate but I have worked out I will only get a SP of £67.84 Have I got that right as I now may have to put off my early retirement to build up my SP.

How many years have you worked in total adding on the 3 years?

Have you gotten a SP statement? Showing your years and current forecast?

If you retire at 57 w/o 35 years you wont get a full basic SP. And if contracted out the full time you wont get any extra either.

What you will get, is the higher amt of either what you would get retiring at March 2016 or April 2016. which is as much as you could hope for. And you will be able to boost this by several methods incl paying in extra, or deferring.

roy_c

In total I will have worked about 42 years, contracted out about 24 years at the lower NI rate but even so £67.84 sounds very low for someone that has paid NI for all those years. Thanks for taking the time to reply atush.

Triumph13

roy_c wrote: »

In total I will have worked about 42 years, contracted out about 24 years at the lower NI rate but even so £67.84 sounds very low for someone that has paid NI for all those years. Thanks for taking the time to reply atush.

Whilst it would be nice if we knew where you got that £67.84 figure from, it is actually completely irrelevant.
What you will get is your foundation amount calculated at April 2016 (and increased annually as usual). Your foundation amount is the HIGHER of the new rules calculation and the old rules calculation. I don't know if that £67.84 is supposed to be the new rules calculation, but your old rules calc is going to be the full £113 a week plus any SSP/ Serps for the years when you weren't contracted out.

Triumph13

webbit wrote: »

tory stealth tax, and you need 30 years contracted in to get the full "new" state pension

Rather than just chanting your 'stealth tax' mantra, how about if you actually look at the numbers.
As someone who was contracted out (so no SSP), but who will retire well after 2016 you are going to pay an extra £20 a month in National Insurance and in return you are going to get an extra £35 a week of pension when you retire. In what way do you see that as a 'stealth tax'?

DaveMcG

The entire purpose of the new arrangement is to reduce the burden of pension credit by increasing the pension of the groups most likely to require pension credit. The cost of this is to be borne by those least likely to require pension credit - ie those in salary related schemes and above average earners.

Private sector salary related schemes will face increased costs when contracting out is abolished and may cut members benefits or shut down the scheme.