Drrr

DRRR

I'm confused about state pension from April 2016. I am a state pensioner and receive the basic state pension of £115 per week. As I understand it someone who starts to receive the basic state pension from April will receive £150 per week, whilst I will only receive £115 + whatever increase +/-2.5% I am entitled to. This will mean that I will be receiving a lot less than a new pensioner. Is this correct? If so is this fair? Is it ageism?

Finst

Do you get any SERPS / S2P state second pension? Were you in a pension scheme that contracted-out of SERPS/S2P? You would then not get this part of the state pension but paid less National Insurance (and got a Guaranteed Minimum or GMP from your work pension)

The Government has slowly gotten rid of the original 2 tier system (BSP = same for everyone, SERPS/S2P = earnings related top up). Instead, there is now going to be only one pension, which is roughly about the same as the old BSP plus the AVERAGE SERPS/S2P pension.

From the perspective that the average person will get about the same, you could agrue it is very correct and fair.

There are winners and losers though. Because it isn't dependent on salary, the new system gives more to people who earned less and less to people who earned more, if that makes sense.

When you look at old system vs new system, you need to add up all the parts to see if you are better or worse off.

mgdavid

Noo it's not correct.
There are transitional arrangements to even out as far as possible so yes it's mostly fair.

jem16

DRRR wrote: »

I'm confused about state pension from April 2016. I am a state pensioner and receive the basic state pension of £115 per week.

Then it is likely you have been contracted out of SERPS/S2P through a company pension scheme or personal pension.

As I understand it someone who starts to receive the basic state pension from April will receive £150 per week,

Your understanding is wrong. The £150 rate is for someone with a full 35 years contribution who was never contracted out. Some will receive that, some will receive more and some will receive less.

For example my entitlement under the new rules is around £70pw. Under the old rules I will receive £115pw as I have been contracted out. Fortunately for me and many others I will receive the higher of the two so I am no better or worse off. You would probably be the same.

chiefie

It cant be classed as ageism if people older than you get nor 😉

atush

If you get only basic SP now, you'd have gotten even less in the new system (if you were younger).

You have an occupational pension instead of S2p, which is why you would not get the new full flat rate. As that money will have been used to give you a larger private pension.

You will have done better, so stop feeling aggrieved.