Women’s’ State Pension.

Silvertabby

Malthusian said:

You are getting the full State Pension you paid for.

For most of your working career you got a basic State Pension (which is currently £134.25pw) in exchange for paying NI contributions to the Government, plus an additional State Pension which you could get either by paying the Government for additional State Pension, or you could also get it from your occupational pension scheme (known as contracting out). The Teacher's Pension was contracted out so you got your additional State Pension via the Teacher's Pension.

In 2016 a new type of State Pension was introduced where you get (at current rates) £175.20 per week if you paid 35 years of full NI contributions to the Government.

You have not paid 35 years of full NI contributions to the Government. Because some of your NI contributions went towards the Teacher's Pension.

Therefore if you want the full New State Pension you have to make up for those contributions that went towards your Teacher's Pension instead of the Government.

You can't have a cake from one bakery and eat a cake for free at another bakery on the grounds you've paid Bakery 1 for a cake so it's unfair that you should have to pay Bakery 2 to make you another cake.

That's how the system works. If you'd prefer the WASPI version of reality, substitute the following: you're right, it's not fair, moan moan moan, please give money to our advance fee fraud scam.

Actually, in the case of the public sector, the employee NI rebate went into our pockets, not into the pension scheme.
When contracting out ended in April 2016, public sector workers immediately paid an extra 1.4% NI per month.  

jamesd

BINSKIN29 said:

In 3 weeks I am due my first  state pension two months before my 66th birthday. I have 37Yrs NI contributions 2 more than needed and I’ve been told I cannot get a full state pension because I retired on my teaching pension eight years ago and Lived off this no benefits ever since. I am now told they changed the law in 2016 and I must pay back 4 yrs contributions. No one told me and no one believes me. Friends a few months older than me are now about £50,000 better off than I am. Unfair? 

Yes, it's unfair. The change to the rules in 2016 was to your benefit and it's unfair of you to suggest that it harmed you in any way. It didn't, it's helping you.

When you retired you had accrued at least these pension benefits:

1. Basic State Pension entitlement of 1/30th for each year worked (years before 2016), credited or purchased.. 1/30th of the current BSP of £134.25 a week is £4.475 a week. You fully meet the requirements for the full Basic State Pension system that you paid into with 37 years and hence are entitled to at least its full £134.25 a week.
2. In TPS you were contracted out of getting most of the earnings-related part of the state pension. This is instead paid out as part of your teaching pension. A person not in a defined benefit pension would be getting a similar amount as part of their Additional State Pension. Compare the two people but look only at the state pension part and you'd get a misleading picture.
3.A small amount of earnings-related Additional State Pension because contracting out wasn't 100%. A couple of Pounds a week.

Your statement tells you what you had accrued when you retired because in your circumstances the old rules (the ones when you paid in) will be used. You get whichever of the old or new rules calculations pays you the most. In your case the 2016 rule change didn't increase or decrease your state pension entitlement by even a penny and you'll get exactly what you signed up to and paid for (though that's ignoring the other ways it became more generous to you over the years, you actually get more than you'd be  entitled to if the rules for each year you  paid in were used).

Under the rules when you retired you could not increase your state pension by buying more years because there was no increase for having more than 30 years towards the basic state pension and you already had that. Closed case, nothing doable by you to get a higher state pension.

In 2016 a single tier state pension was introduced. This eliminated all future earnings-related state pension accruals and substituted 1/35th of the single tier pension per year from 2016 earned, credited or purchased. To partially compensate for this the single tier pension rate was set (today) at up to £175.20 a week and accrual at 1/35th of this per year, £5.006 a year.

And that's where you got lucky and have the opportunity now to buy cheap extra state pension that you haven't paid for and couldn't have bought under the rules when you retired.

The single tier pension of £172.20 isn't just a pension rate, it's a cap on accrual from working, credits or buying more years. Someone with your work record but not having lots of years in a defined benefit pension would be over that because their earnings-related pension bit is paid as part of the state pension. But you haven't reached that state pension cap yet because most of your earnings-related  bit is being paid by TPS and doesn't count towards it.

So, your state pension position has improved because of the 2016 change by:

1. it was impossible to buy years to get more when you retired but you can now buy years to increase to £172.70. Or you can do nothing and keep everything you were entitled to when you retired
2. years purchased from 2016 get you £5.006  a week more instead of £4.475 a week.

Assuming your life expectancy is normal you should smile broadly, take the windfall opportunity that you never earned or paid for and buy those extra years. You're one of the clear winners from the 2016 changes and you should be celebrating that, not feeling slighted.

Whether the last year should be bought depends on how close the other years take you to the cap. If they get you to say £172.19 the final year would get only an extra penny a week and wouldn't be worth doing.

Thanks for asking in a place where people understand the changes and can explain that you're being offered an excellent windfall opportunity that you didn't have before. It should leave you far happier with your position than you seemed to be initially.

AlanP_2

Just a point of clarity which may help the OP and anyone else in a similar position that reads this at some point - Does the purchase of additional years have to happen before SP starts to be paid?

Linton

AlanP_2 said:

Just a point of clarity which may help the OP and anyone else in a similar position that reads this at some point - Does the purchase of additional years have to happen before SP starts to be paid?

You can buy NI for available pre-SP years after you have started taking SP. 

german_keeper

Silvertabby said:

german_keeper said:

As a career Civil Servant it seems obvious to me that the new state pension is a good deal for most if not all public sector workers, although back in 2016 my initial reaction was it was just a grab of an extra 1.4% NI!!
But what would interest me is an explanation of the calculation by the OP about friends being £50,000 better off.

I think that's just waspe trying to stir things up even more by cherry picking the old rules (age 60) and the new rules (£175 per week).

Thanks ST I suspect you are right. Presumably some headline figure on a website or something. The 50 grand for a "few months older" just intrigued me.

Silvertabby

german_keeper said:

Silvertabby said:

german_keeper said:

As a career Civil Servant it seems obvious to me that the new state pension is a good deal for most if not all public sector workers, although back in 2016 my initial reaction was it was just a grab of an extra 1.4% NI!!
But what would interest me is an explanation of the calculation by the OP about friends being £50,000 better off.

I think that's just waspe trying to stir things up even more by cherry picking the old rules (age 60) and the new rules (£175 per week).

Thanks ST I suspect you are right. Presumably some headline figure on a website or something. The 50 grand for a "few months older" just intrigued me.

£175 x 52 = £9,100

£9,100 x 6 = £54,600.

Even though the vast majority of  of women who retired at 60 wouldn't have received anywhere near £175 per week (old State pension plus SERPS/SP2),  WASPE thought that quoting this mythical 'loss' of £50K for everyone sounded much sexier and would be more of a draw. 

WASPE's original aim was to just overturn the 2011 increases (which I would have supported) - but when they realised that most women weren't interested, they started waving the multi £Ks figures around, based on all women born in the 1950s reverting to a SPA age of 60. 

Remember that WASPE need contributions from their members to pay for their legal fees, 1st class train tickets to protest meetings, bottles of champagne to quaff of the way, etc. 

Malthusian

Silvertabby said:

Actually, in the case of the public sector, the employee NI rebate went into our pockets, not into the pension scheme.
When contracting out ended in April 2016, public sector workers immediately paid an extra 1.4% NI per month.  

I stand corrected but it comes to the same thing in the grand scheme. Teachers demand a certain amount of money in exchange for getting out of bed in the morning (split between their pension and their pay packet), and if the NI rebate is paid into the pension scheme, their employer has more money available to put into their pay packet.

The important point is that the money in question didn't go to the Government to pay for a full New State Pension.

jem16

BINSKIN29 said:

Friends a few months older than me are now about £50,000 better off than I am. Unfair? 

If they are only a few months older than you, they would certainly not be £50k better off. They might be around £3k/£4k better off but that's it. The last woman to receive her state pension at age 60 was born 5th April 1950.

Silvertabby

Malthusian said:

Silvertabby said:

Actually, in the case of the public sector, the employee NI rebate went into our pockets, not into the pension scheme.
When contracting out ended in April 2016, public sector workers immediately paid an extra 1.4% NI per month.  

I stand corrected but it comes to the same thing in the grand scheme. Teachers demand a certain amount of money in exchange for getting out of bed in the morning (split between their pension and their pay packet), and if the NI rebate is paid into the pension scheme, their employer has more money available to put into their pay packet.

The important point is that the money in question didn't go to the Government to pay for a full New State Pension.

Exactly.  It went into our pockets, which makes our pension schemes even more attractive.  1.4% NI rebate doesn't sound much, but it equates to roughly £25 per month for someone on the average wage (£25K) or £15 per month for someone on low pay.

When contracting out ended in 2016 some LGPS members opted out of the pension scheme because they reckoned that they  'couldn't afford' the pension contributions on top of the NI increase.  

jem16

Silvertabby said:

Malthusian said:

Silvertabby said:

Actually, in the case of the public sector, the employee NI rebate went into our pockets, not into the pension scheme.
When contracting out ended in April 2016, public sector workers immediately paid an extra 1.4% NI per month.  

I stand corrected but it comes to the same thing in the grand scheme. Teachers demand a certain amount of money in exchange for getting out of bed in the morning (split between their pension and their pay packet), and if the NI rebate is paid into the pension scheme, their employer has more money available to put into their pay packet.

The important point is that the money in question didn't go to the Government to pay for a full New State Pension.

When contracting out ended in 2016 some LGPS members opted out of the pension scheme because they reckoned that they  'couldn't afford' the pension contributions on top of the NI increase.   

Oh dear, very silly thing to do.