Old and new state pension

greenglide

Mojisola wrote: »

If you retire under the old scheme with an income of less than £151.20, you can claim Pension Credit.

Is that still going to be the case under the new pension system?

Yes you will be able to.

Savings credit isnt allowed for people with an SPa date on or after 6/4/2016 but pension credit remains - deliberately pitched at a level equal or below the nSP top rate.

If the triple lock survives it is possible that the two may diverge with PC uprated by CPI and nSP uprated by triple lock (so 2.5% in these low inflation days).

Currently only the basic pension is uprated by triple lock so under old rules you only get £113 uprated by 2.5% while nSP will uprate up to £151 by triple lock.

So £150 on old rules (basic + AP) is "worth less" than £150 under new rules.

Anyone with more than the maximum nSP (like me:) with significant AP) is better of under new rules as long as the triple lock survives and inflation is low.

jamesd

agarnett wrote: »

This sounds like bias against "these people's" genuine concern, which doesn't sound like you, jamesd!

It's simply explaining where the money that isn't showing up in the state pension payment is being paid from instead.

agarnett wrote: »

Did I read somewhere that there are around 4 million of "these people" due to reach State Retirement Age between April 2016 and April 2025

Unlikely because "these people" are the ones who will or have reached state pension age before the flat rate came in, not after.

There's another group who were contracted out and who will work more years after the flat rate comes in and who can then end up getting both the contracted out gain and more or all of the flat rate cap level. If it wasn't for the much lower payment for deferring their state pension this group would be even better off than those reaching SPA before the flat rate.

bigfreddiel

Independent wrote: »

When the new state pension kicks in (Apr 2016 is it ?) will older pensioners on the old state pension (£115pw approx) have their pension increased to the new level (£149pw approx). Sorry about the approximate figures for date and amounts.

I should be amazed at how often this question comes up! Surely everyone knows the answer by now.

There again it's amazing the ignorance, or is it just a lack of interest till it really matters?

It's a bit like a fasting blood test! The phlebotomist told me this the other day about a person who arrived for their test. When asked if they had had anything to eat since the night before they answered 'no', but at the time they were actually eating a sweet! Amazing isn't it!

But I must admit the gov was a bit economic with the truth when they revealed the flat rate sp!

Cheers fj

p00hsticks

Independent wrote: »

jem16,

Thanks for the answer. I do feel an injustice here as older pensioners are being penalised.

The old basic state pension is £113/115 approx.
The new basic state pension is £148. approx.

These are the base amounts before extra contributions add to these amounts.

How can this be fair.

It's not possible to add extra contributions to the new state pension - £148 approx (probably closer to £155) is the MAXIMUM amount that anyone can get under the new rules - many will get less.

Many under the existing rules will have started receiving their pension at an earlier age, required few years of NI contributions to qualify, and be receiving as much or more than the maximum achievable under the new rules.

Personally, having got my pension forecast, I do considerably better under the old rules than the new

mollymoneybags

Jamesd is wrong - ‘the only way that they could have just that (£115 basic state pension) is if they were contracted out of the additional earnings-related state pension’ , and jem16 – ‘ If anyone is just on the current basic state pension of around £113pw, it's more than likely that they were in a contracted out pension scheme’
Not so. I receive the basic as I have been self-employed all my life, dutifully paying my full quota of self-employed stamps. My Nat Ins contributions did NOT entitle me, over the years, to full dole payments, full sick pay, maternity payments, and sundry other welfare state amenities, but it DID entitle me to use the National Health service and guaranteed me the BASIC STATE PENSION. I had nothing to contract out of. You can argue that self-employment is a type of contracting out, since I could have paid extra voluntary contributions, to entitle me to the full quota of facilities. However I repeat my point that the full amount which I DID pay (by the way -my age group - 39 years for women, 44 for men, only recently changed to 35 for younger ones…) was mainly to entitle me to the Basic State Pension
However all arguments about contracting-out, SERPS, graduated pensions, private pensions etc etc, are irrelevant. If the government has decided that one year the basic is £115, and the next it is £148, then that is what I should get, and that should be the starting point for everybody else’s to be built on top of that.

MABLE

According to my state pension online forecast I will get £129.59 per week under the old system. I certainly do not feel hard done by because I have been contracted out for most of my working life and have 2 final salary pensions.

hugheskevi

From the moment the new pension system was announced the Government was clear that the new system will be delivered within the cost envelope of the existing system. Analysis has shown that the new system will cost pretty much the same as the current system in the short and medium term, but lead to big savings in the longer run.

But even in the short and medium term, the new system is an expenditure cut. As seems normal with many new policies, the generation who will lose the most will be the youngest folk in work today. The main thing that surprises me is that there appears to be large numbers of existing and soon-to-be pensioners/near-pensioners who think they either have been or should be given an unexpected hand-out worth about £2,000 p/a despite the state of the country's finances.

brewerdave

MABLE wrote: »

According to my state pension online forecast I will get £129.59 per week under the old system. I certainly do not feel hard done by because I have been contracted out for most of my working life and have 2 final salary pensions.

.....I'm in a similar position in that my latest forecast is showing a total of £131.79 -HOWEVER, I'm still not trusting that this is getting the contracted out deduction correct so all my future spreadsheet planning is based on £115.95:rotfl:

mollymoneybags

Mable, I’m glad you don’t feel hard done by, but everybody’s state pension is different, because of the old complexities this new system is supposed to be sweeping out of the way’ Also everybody has organised (or not) supplementary work pensions, private pensions etc . That’s not my point. It’s this huge variation in state pension entitlement that causes confusion in everyone’s mind and allows the government to bring in such discriminatory practices. I happen to be on the basic. My beef is with a government that claims they’re setting up ‘level playing fields’ and ‘we’re all in it together’, and then brings in sneaky legislation to create second rate pensioners.

seven-day-weekend

My husband already gets more than £148 . My own is £124, but 13 years of my contributions came from Home Responsibilities Protection, which don't build up SERPs, and then I was contracted out into the LGPS.

I personally think if you have paid more in, you should get more out, providing that everyone has a decent basic. I do agree the current system is unfair to self-employed people.