Second state pension no one knows about?

bigfreddiel

Well the Daily Mail lives up to its usual old waffle today. Headline was "Workers in 20s to lose £19k under new pension". article by their finance and investments expert James Salmon. Somehow he can predict the outcome of tomorrow's nSP in 47 years time!

Then he states "I think people would be surprised to find out that there was a second state pension, so I don't think people are aware of the top-up".

Surely he's wrong! It's such a lightweight article without any conclusion, and inaccurate, you need to read it for yourself and draw your own conclusion.

Cheers fj

hyubh

bigfreddiel wrote: »

Well the Daily Mail lives up to its usual old waffle today.

By the by, I thought Steve Webb's piece in the Mail recently was pretty good - writing simply and getting the key points (relative to the question asked) across:

http://www.dailymail.co.uk/money/pensions/article-3513785/I-paid-NI-44-years-feel-hard-STEVE-WEBB-replies.html

That said, I see the Mail's actual journalists are still peddling the line that previously contracted out people, by definition, are 'losing out' under the new system, which is unfortunate.

Headline was "Workers in 20s to lose £19k under new pension". article by their finance and investments expert James Salmon. Somehow he can predict the outcome of tomorrow's nSP in 47 years time!

Eh? The single tier pension by design will be significantly less for most people in their 20s and 30s who would otherwise have accrued a full working life contracted in under the old system. This isn't scaremongering - it's part of the point of the new system, i.e. to save money in the long run.

greenglide

And there is the loss of indexing of the GMP for those who will still get DB schemes (except for public sector who have an SPa date between 6/4/2016 and December 2018).

Lots of people in the press talk about losing £10,000 £15,000 £20,000 without any mention as to how the figures are made up. The expected lifespan would be nice to know!

missbiggles1

bigfreddiel wrote: »

Well the Daily Mail lives up to its usual old waffle today. Headline was "Workers in 20s to lose £19k under new pension". article by their finance and investments expert James Salmon. Somehow he can predict the outcome of tomorrow's nSP in 47 years time!

Then he states "I think people would be surprised to find out that there was a second state pension, so I don't think people are aware of the top-up".

Surely he's wrong! It's such a lightweight article without any conclusion, and inaccurate, you need to read it for yourself and draw your own conclusion.

Cheers fj

It wouldn't surprise me.

I don't come on this board often but, on other boards, most people seem to think that everybody gets nothing but the basic SRP and are stunned when I tell them how much I get.

bigfreddiel

I guess it's human nature, until you are actually affected by anything, it's just not interesting enough to 'waste' time looking into it.

One thing that focused my mind was about five years before I was due to retire, I suddenly realised my income was not going on as it was, and how was it all going to work out in retirement. So many spreadsheets later, a bit of planning. A bit of research it's now all looking good, final block in the form of my SP and AP slot into place in a few months.

Cheers fj

GunJack

bigfreddiel wrote: »

I guess it's human nature, until you are actually affected by anything, it's just not interesting enough to 'waste' time looking into it.

One thing that focused my mind was about five years before I was due to retire, I suddenly realised my income was not going on as it was, and how was it all going to work out in retirement. So many spreadsheets later, a bit of planning. A bit of research it's now all looking good, final block in the form of my SP and AP slot into place in a few months.

Cheers fj

Agreed.... most people just aren't interested. I only really got interested recently, because of the changes, as previously I knew what I'd be getting when as I've been contracted out all my working life. I'm still 11.5 years away from Pension #1 (deferred Civil Service, payable at 60) but the SP changes meant (for me) I needed to take an interest.

jamesd

bigfreddiel wrote: »

Headline was "Workers in 20s to lose £19k under new pension". article by their finance and investments expert James Salmon. Somehow he can predict the outcome of tomorrow's nSP in 47 years time!

The headline to the story is accurate and it is not James Salmon who is making the prediction, it's the Pension Policy Institute.

The story is very similar in essence to Young to be £19k worse off under flat-rate state pension which featured the result of research by the House of Commons Library and Under-40s worse off as result of state pension changes, data shows, which used DWP numbers.

The core issue is that even a low earner with a full working life could expect a state pension over £190 under the pre-flat rate rules due to the earnings-related additional state pension. Now the ASP no longer accrues a person working under the flat rate system only will be capped at just the flat rate circa £155 instead, as will those not already over that level.

bigfreddiel wrote: »

Then he states "I think people would be surprised to find out that there was a second state pension, so I don't think people are aware of the top-up".

He did not say that. The text is a quote from Chris Curry, director of the Pensions Policy Institute.

bigfreddiel wrote: »

Surely he's wrong! It's such a lightweight article without any conclusion, and inaccurate, you need to read it for yourself and draw your own conclusion.

My conclusion is that you should have read it to a decent standard of comprehension before making your post.

greenglide

Did the article factor in the impact of the "benefit" of auto-enrolment and the increase in the mandatory employers contribution in the future? I never noticed it.

Of course this is of no benefit to people who already get more than that from their employers scheme - they will presumable get their differentials squeezed!

dprice1164

I currently have 39 years NI contributions, of which 30 were reduced (COPE). My state pension forecast is therefore less than the full £155.pw at current rates.
I'm currently employed and continue to pay full NI contributions. If this continues until retirement age in 2024, will this increase my state pension closer to the full amount?

greenglide

Yes. For each complete year of contributions you will add 1 / 35 of £155.65 at todays money (approximately £4.44) until you reach the £155.65 figure or you reach SPa.

woolly_wombat

hyubh wrote: »

By the by, I thought Steve Webb's piece in the Mail recently was pretty good - writing simply and getting the key points (relative to the question asked) across:

http://www.dailymail.co.uk/money/pensions/article-3513785/I-paid-NI-44-years-feel-hard-STEVE-WEBB-replies.html

Yes, Steve Webb is free now to make the following admission in the final paragraph of that article:

"Overall, the new system costs roughly the same as the old system in the early years. Over time it will become cheaper because people can no longer build up the relatively large additional state pensions which are available under the current system."