Omnishambles?

michaels

I guess that is me and the Govt (as shown on their DWP pensions calculation website) who misunderstand then. Basically in the past if you earned above a certain threshold soem of your NI contributions went towards SERPS/SS2P which built up a pensions entitlement above the basic state pension level (unless contracted out). With the new state pension there is no additional pension entitlement but where an individual had already accrued extra entitlement this is added to the entitlement they have accrued towards the new pension based on contribution years so it is easy to have reached the maximum new pension level with fewer than 35 years of contributions - about 25 years in my case - after which you still have to pay the same amount of NI but your pension does not increase any further.

wotsthat

michaels wrote: »

I guess that is me and the Govt (as shown on their DWP pensions calculation website) who misunderstand then. Basically in the past if you earned above a certain threshold soem of your NI contributions went towards SERPS/SS2P which built up a pensions entitlement above the basic state pension level (unless contracted out). With the new state pension there is no additional pension entitlement but where an individual had already accrued extra entitlement this is added to the entitlement they have accrued towards the new pension based on contribution years so it is easy to have reached the maximum new pension level with fewer than 35 years of contributions - about 25 years in my case - after which you still have to pay the same amount of NI but your pension does not increase any further.

I've been contracted out since 1990 and have built quite a pot averaging 7.5% return. On top of that every year of employment until I'm 55 gives me an extra qualifying year by which time I hope to have retired or semi-retired and be paying very little or no NI whatsoever.

Some luck involved but from the off I always preferred to have a pot with my name on it. Seeing that pot build also encouraged me to make additional pension savings.

It's folly to rely on government promises to pay the electric bill in retirement. It's so easy to break promises because there's no come back - you can hardly blame Hammond for not keeping the promises of Barbara Castle and the like.

michaels

wotsthat wrote: »

I've been contracted out since 1990 and have built quite a pot averaging 7.5% return. On top of that every year of employment until I'm 55 gives me an extra qualifying year by which time I hope to have retired or semi-retired and be paying very little or no NI whatsoever.

Some luck involved but from the off I always preferred to have a pot with my name on it. Seeing that pot build also encouraged me to make additional pension savings.

It's folly to rely on government promises to pay the electric bill in retirement. It's so easy to break promises because there's no come back - you can hardly blame Hammond for not keeping the promises of Barbara Castle and the like.

You got this one right, I got it wrong, I thought that contracted into ASERPS/S2P was equivalent to DB whereas contracted out = DC and therefore as the rest of my pension is DC, not contracting out was spreading my risks....you live and learn. Then again Hungary (I think) nationalised private pensions so don't spend it yet....