Nice People Thread No. 15, a Cyber Summer

silvercar

A lot of my friends have earmarked the lump sum to clear mortgage shortfalls due to having interest only mortgages. Either endowments not performing as well as was initially predicted or extra borrowing with no plan Also some careers haven't turned out as lucrative as planned and children have turned out to be more expensive than expected.

I wouldn't be surprised if some have inadequate pension arrangements and have excessive borrowing. I have heard some half-in-jest jokes about not planning a pension because you don't know when the inheritance will land.

silvercar

michaels wrote: »

I was a bit peed off to discover that had I contracted out of serps/s2p for 10 years I could have built up an additional pension and then in the next ten years still pay enough NI to get a full state pension. Instead by the end of this year I will have the full state pension entitlement and all the NI I pay thereafter will not add 1 penny to my pension. At the time I made the decision contracting out was presented as the more risky option and this changing of the rules after the event seems unfair.

I thought you set your income levels to minamise your NI contributions.

Generali

michaels wrote: »

I was a bit peed off to discover that had I contracted out of serps/s2p for 10 years I could have built up an additional pension and then in the next ten years still pay enough NI to get a full state pension. Instead by the end of this year I will have the full state pension entitlement and all the NI I pay thereafter will not add 1 penny to my pension. At the time I made the decision contracting out was presented as the more risky option and this changing of the rules after the event seems unfair.

Given the extent to which you game the rules, I think you are always going to be very strongly impacted by any change to those rules.

michaels wrote: »

Is it still the case that if you take your state pension abroad including in the eu you don't get any annual increases?

The way the rules are looking right now, if I come back to the UK to work for a year or two I hope I can reset the clock on that so that I can get 20 years of inflation uplift with very little pain.

Rearrange the following words into a well known phrase or sentence:

Pot kettle black calling the the

ivyleaf

oldandhappy wrote: »

well taller than Gerrys parents..they where under 5foot but Gerry is 5ft 10ins likewise his younger brother who lives local to here also.oldest sister arriving tomorrow pm for a week:eek:but we are strong people:)and it is only a weeeeeeeeeeeeekkkkkkkk

I love what you did there! Be brave!

michaels The state pension is not frozen if you live in the EU (e.g. my brother lives in Germany atm and his UK State pension does rise) and in some other countries, not sure which ones. I understand it gets frozen if you go to Australia, Canada (not sure about NZ) and some other places, sorry can't remember which. It doesn't get frozen if you go to the US though, which seems quite odd.

silvercar

Parent arrives tomorrow.

DS2, DS2-GF, DS1 all arrive separately and in that order Friday afternoon.

Passover starts Friday night.

It is going to be an interesting weekend!

michaels

silvercar wrote: »

I thought you set your income levels to minamise your NI contributions.

Only for two years then I will have used up all my pension contribution headroom. It is just a matter of had I known how the rules were going to change I would have contracted out but although it was obvious that SERPS/SS2 would be phased out there was no suggestion that entitlement already built up would be confiscated - financial repression as Mr G would say?

silvercar

michaels wrote: »

Only for two years then I will have used up all my pension contribution headroom. It is just a matter of had I known how the rules were going to change I would have contracted out but although it was obvious that SERPS/SS2 would be phased out there was no suggestion that entitlement already built up would be confiscated - financial repression as Mr G would say?

But isn't exactly being confiscated, you have built sufficient to get the pension. No one is taking that away from you?

michaels

silvercar wrote: »

But isn't exactly being confiscated, you have built sufficient to get the pension. No one is taking that away from you?

But they are taking away any benefit from further (compulsory) contributions, it would be fairer if having reached the max level I could now contract out which would be fiscally equivalent to having contracted out before and paying full NI going forward.

I do remember having a brief chat about contracting out with the company pension advisor years ago - I wonder if I have been mis-sold?

Generali

michaels wrote: »

Only for two years then I will have used up all my pension contribution headroom. It is just a matter of had I known how the rules were going to change I would have contracted out but although it was obvious that SERPS/SS2 would be phased out there was no suggestion that entitlement already built up would be confiscated - financial repression as Mr G would say?

silvercar wrote: »

But isn't exactly being confiscated, you have built sufficient to get the pension. No one is taking that away from you?

Strictly speaking I would describe the pension changes as a form of debt default rather than financial repression. Actually in some ways they are the reverse of financial repression: annuities are a form of financial repression as they require you to buy into Government debt at a price lower than that charged by the free market.

michaels will be defaulted on if the new rules stay the same until he has previously been promised to retire as he 'gave' the Government money, under threat of imprisonment I admit, on condition that some would be returned at a later date. The Government has reneged (defaulted) on that promise.

If it makes you feel any better, the default is necessary and inevitable. There will be more to come too.

Watch the Children of the Corn to see how much worse it could be. I suspect that we have a few posters on this site that would happily live in such a society.

Generali

michaels wrote: »

I wonder if I have been mis-sold?

The Government doesn't have to include unfunded pensions in the National Debt for this very reason. I vaguely recall banging on about this incessantly for many years.