New (2016) State Pension - BEWARE!!!

greenglide

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

If people dont know whether they are contracted out or not then they havent ready or understood their pension scheme literature.

If they know nothing about there pension scheme who are they expecting to explain the new system to them.

I have little sympathy for people who refuse to find out these things and then complain "I wasnt told".

saver861

greenglide wrote: »

If people dont know whether they are contracted out or not then they havent ready or understood their pension scheme literature.

Well I read my pension scheme literature but I don't recall anything particularly standing out about being contracted out at the time. I'm not saying its not in there, I'm saying there was not clear or obvious for me to make a connection. I would consider myself at least of average intelligence and possibly slightly above average in terms of financial matters.

It would appear many of my co-workers were equally in the dark or did not read their pension literature.

greenglide wrote: »

If they know nothing about there pension scheme who are they expecting to explain the new system to them.

Well if my circumstances are average and my coworkers are of at least average intelligence also, then there was insufficient explanation. Perhaps the employer should have been more forthcoming on how these changes would impact. I don't recall a single letter, email, flyer or anything else from my employer outlining the impact of being contracted out in relation to the new pension.

greenglide wrote: »

I have little sympathy for people who refuse to find out these things and then complain "I wasnt told".

But .... as stated, ... I have found out the information. Where do you see a statement from me that say's I refused to find out ... or many others.

Not knowing I was going to be impacted did not initially suggest to me I actually needed to investigate further. So, by contrast to your statement, people need to know there is an impact before they look to investigate.

You go to the doctor when you have a symptom .... if you are totally unaware there is a problem you don't seek the assistance of a doctor!!

JezR

saver861 wrote: »

No doubt Mrs Altmann would be pleased at your interpretation of her words.

Rather than disingenuous reports that she actually said the word 'mis-sold' do you mean? She certainly showed her inexperience in the world of politics to agree casually with a journalist in the course of a conversation who used that phraseology though.

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.

Which is what Altmann has said she has been trying to improve - of course there may well be differing views on how well or poorly she might be succeeding with this. I will credit her blog as a good attempt to explain things both systematically and thoroughly but suspect the reading age might still be too high.

As you have indicated, the main difficulty is not just that the changes are misunderstood, but the existing system isn't understood that well either. Not surprising because of its complexity.

greenglide

Well I read my pension scheme literature but I don't recall anything particularly standing out about being contracted out at the time.

If it was contracted out then the literature would have said so, equally you would have paid the contracted out rate of NI which is lower.

DB pension schemes were almost always contracted out although there are exceptions. My scheme handbook says:-

This booklet also describes the State Pension Scheme on page 17 since in planning for your retirement you should take account of State pension benefits in addition to benefits from the Plan. With regard to State pension benefits, you will be contracted-out on a salary related basis.

I understand the Plan is contracted-out, what does this mean to my pay?

The Plan is contracted-out of the State Second Pension (S2P). This means you pay lower National Insurance contributions on earnings between the Lower Earnings Limit and the Upper Accrual Point (see page 17 for further details on the State Pension Scheme).

GunJack

xylophone wrote: »

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

all I can say after reading that is thankfully my deferred Classic CSP is safe...

hyubh

saver861 wrote: »

Well I read my pension scheme literature but I don't recall anything particularly standing out about being contracted out at the time.

Oh really? A few examples:

https://shareweb.kent.gov.uk/Documents/council-and-democracy/pensions/LGPS/guide-effect-state-pension-LGPS.pdf

http://www3.hants.gov.uk/scheme-guide-april-2014.pdf (section 3)

https://www.eapf.org.uk/~/media/document-libraries/eapf2/fact-sheets/20150323-pi-guide-2015.pdf?la=en

Also literature put out by the unions, e.g. this recent pamphlet from Unison:

https://www.unison.org.uk/content/uploads/2016/02/State_Pension_Update_April_2016.pdf

Can't find an example online, but the literature LGPS funds put out in the late 80s when covering pensions legislation made membership optional was also particularly clear about the implications of opting out of the LGPS (or LGSS as then was) and so contracting back into SERPS.

kidmugsy

Some of this thread is reminiscent of Violet Elizabeth Bott.

mgdavid

saver861 wrote: »

.............
You go to the doctor when you have a symptom .... if you are totally unaware there is a problem you don't seek the assistance of a doctor!!

No, no, thrice NO!

The sensible / thoughtful / informed / organised people go to the doctor regularly (annually?) for a check-up.
Perhaps well-man and well-woman clinic checkups are something else you've never heard of?

saver861

JezR wrote: »

Rather than disingenuous reports that she actually said the word 'mis-sold' do you mean? She certainly showed her inexperience in the world of politics to agree casually with a journalist in the course of a conversation who used that phraseology though.

Which is what Altmann has said she has been trying to improve - of course there may well be differing views on how well or poorly she might be succeeding with this.

The fact that she acknowledged the new pension was mis-understood and needs improving clarifies my point - it was mis-sold. Whatever way you look at it, the information put out was not sufficiently informative to ensure the majority clearly understood it.

Whether you call in mis-sold, mis-informed, or some other phrase, it still means the intended audience were left confused and unclear about the product.

By your own premise, if she had been more evasive, she might have dodged the question better!!! How would that solve anything? Far too much of that happening all the time with our politicians. When they do give an honest answer as in this case you say she was politically naive and should have been more evasive with the truth? However, that would not change the facts that people were left unclear about the new pension.

If you tell me today is Tuesday and I agree with you, its because I too believe today is Tuesday.

But ... don't take my word for it .... The WPC state that the new pension was not made clear and that failures in communication mean too few people understand it.

So, Altmann say's its so .... the Work and Pensions Committee says it so ... I'm saying it's so .... but you won't still be convinced I fear!!

hyubh wrote: »

Oh really? A few examples:

Also literature put out by the unions, e.g. this recent pamphlet from Unison:

None of those were schemes that I was a member of but I have no doubt there will have been information on Contracting Out.

One of your links is a document updated in 2009 ... long before the new pension was even mentioned. Only the Unison article connects the two issues of contracting out and not qualifying for the full new pension even with 35 years NI's.

Thus the point is that the information was insufficient for many - why else would there be some much confusion over it. The fact that they have changed pension statements three times is an example of inept communication.

People can bleat all they like about the fact that people shoulda, coulda, woulda .... as it stands, they didn't ...... and where those numbers are significant then there has to be a root cause other than peoples 'laziness'.

55% of people will get less than the full £155 per week. In the first year, 87% will not get the full £155 per week. By 2040, i.e 24 years time, just about 80% will get the full £155 per week.

Thus the majority of early claimants will not get the full pension but this was not made clear at the outset. Equally, given that such percentage would not get it, in itself it demonstrates a need for clarity for this majority.

saver861

mgdavid wrote: »

No, no, thrice NO!

The sensible / thoughtful / informed / organised people go to the doctor regularly (annually?) for a check-up.

Let me guess ...... you would be one of them??

Ah, thought so ... if only I had known I could have sought your advice ..... darn.

Man ..... how did all those men and women not a clever as you survive????

Tricky that one .... hmmm ... .. not sure I'm smart enough for that one .... think I'll have to pass.
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