New (2016) State Pension - BEWARE!!!

saver861

hyubh wrote: »

People like the OP (and yourself?) are extremely put out that they won't be getting a benefit that they were never due to get in the first place.

Pay attention now .... I've said this several times .... but it seems the message has not got through as yet. Listen up now .... ready ... ok ....

I have no complaint at the pension I will be getting. I will be getting what I understood I would get prior to all the new pension stuff. However, when the new pension info was announced, I was under the impression that if I had 35 years I would qualify for the full pension. Many others I spoke to about it at the time were under a similar impression.

The reason that occurred is the way the information was put out by the Government. The 'good news' story.

The point is ... and I'm saying it again ... had the information been put out in a different context then many people would not have been under a mis-apprehension. That is the problem now .... so while nobody under a 'contracted out' pension is losing anything, many are under the impression they have been mis-led. That leads to mistrust and dissatisfaction.

So if there is a big sign up in Tescos ... "Eggs Half Price" ... great, customer thinks "I'll have a dozen". However, when customer gets home and finds there is only 6 eggs in the box then, while said customer has not 'lost' anything nonetheless the customer will feel aggrieved.

hyubh wrote: »

You're early retired on an unreduced council pension! Seems you're disappointed that your ability to extract money from the public purse is restricted...?

Seems like you want to keep perpetuating that same old line .... if it makes you happy .... Personally though, I'm quite happy with what I have got .... if there are other entitlements that I qualify for then I will take them too. I've paid into the public purse for many years.

hyubh wrote: »

If at one point a person thinks their state pension will suddenly shoot up, then at a later date realise they will, in fact, only be getting what they were always going to get, the appropriate response is not to whine and moan about the new state pension being 'mis-sold'.

No .... the appropriate action would have been that the appropriate information was put out there from the outset. That's what should have happened. It did not ... so like the Tesco customer, people feel mis-led .... and that is because they were mis-led. If you don't think the Government was putting spin on the info then .... well ...

Take some notes ... it will save me repeating some of the above that I have repeated several times already.

JezR

I carry no candle for her, but Altmann never in her own words described the new state pension as 'mis-sold'. She has said a number of times that it was 'mis-understood' (*). 'Mis-sold' was the phrase of a journalist. As has been mentioned here many times, the way historic contracting out would be treated was present right back to the early Green Paper days and hasn't changed.

The misunderstanding developed because there was too much emphasis in the communications for a year or two on the long-term flat rate accrual for those who would be in this pension the whole of their working life. Important to be clear on this, but only for people in 35+ years' time, not for retiring in the near future. I think Webb too recognised this emphasis caused a problem, but it had taken hold by then. Newspapers that reported the contracting out treatment correctly in 2011 then reported it as though it was a new revelation in 2015. The same is now happening over the increase in NI resulting from the final end of contracting out.

(*) I believe she has said that some annuities have been mis-sold though.

oldus_gittus

I was contracted out in 1978 for the rest of my working days and found recently my pension was not going to get full indexing from age 65 ( part of my GMP ) that was promised by the government of the day.

DaveMcG

saver861 wrote: »

No .... the appropriate action would have been that the appropriate information was put out there from the outset.

But it was - this was the first factsheet released when the new pension was announced:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf

page 9

If you have previously been contracted out of the additional State Pension, a deduction will be applied when we calculate your foundation amount. This reflects the fact that, whilst you were contracted out, you paid lower National Insurance contributions and your employer received a National Insurance rebate to fund your workplace pension. Therefore, you could have 35 qualifying years and not[FONT=&quot] receive £144 per week[/FONT]


So quite clear.

One of the problems, however, is that financial journalists are too lazy to read anything other than the first couple of lines of press releases. They are as we speak all writing "stealth tax" stories about NIC increases due to contracting out being scrapped despite the fact that this change has been in the public domain for years (page 12 of the above fact sheet).

zagfles

oldus_gittus wrote: »

I was contracted out in 1978 for the rest of my working days and found recently my pension was not going to get full indexing from age 65 ( part of my GMP ) that was promised by the government of the day.

Yes this is certainly an unfair anomaly with the new state pension, which we've discussed in great detail here, though the only net losers will be those who retire in the next couple of years - for others the benefit of being able to build up further state pension will generally outweigh the non indexation of pre 88 GMPs.

Sipowicz

Zagfles, would you please provide a link to the discussions re the index linking of GMPs. I've tried, but failed to find them. Thanks in advance.

xylophone

though the only net losers will be those who retire in the next couple of years

I'm sure that will be a comfort to those affected (which does not include public sector workers....)

https://www.gov.uk/government/news/government-one-step-closer-to-introducing-new-state-pension-this-year

saver861

JezR wrote: »

I carry no candle for her, but Altmann never in her own words described the new state pension as 'mis-sold'. She has said a number of times that it was 'mis-understood' (*). 'Mis-sold' was the phrase of a journalist.

No doubt Mrs Altmann would be pleased at your interpretation of her words. However, let us take the phrase 'mis-understood'. Now how does that come about? The fact that it was 'mis-understood' by so many means the information provided was not fit for purpose. If you are a school teacher, trainer, coach, whatever, and the message you are delivering is not being received by most or majority of your students then the message is garbled.

DaveMcG wrote: »

But it was - this was the first factsheet released when the new pension was announced:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf

page 9

If you have previously been contracted out of the additional State Pension, a deduction will be applied when we calculate your foundation amount. This reflects the fact that, whilst you were contracted out, you paid lower National Insurance contributions and your employer received a National Insurance rebate to fund your workplace pension. Therefore, you could have 35 qualifying years and not[FONT=&quot] receive £144 per week[/FONT]


So quite clear.

'Foundation amount' ... caused any amount of confusion and has been changed at least once.

'Contracted Out' .... what's that. I had no idea I was 'contracted out'.

It does not even refer to public sector where most would have been contracted out.

So, I'm afraid not quite clear at all for many who may have got to the factsheets in the first place.

greenglide

Zagfles, would you please provide a link to the discussions re the index linking of GMPs. I've tried, but failed to find them. Thanks in advance.

A forum search has found:-

https://forums.moneysavingexpert.com/discussion/4509161

https://forums.moneysavingexpert.com/discussion/4509161

There are plenty more

Sipowicz

Thank you greenglide.