Mrs GC's Pension

Audaxer

GunJack said:

HAng on......

not all of Mr G-C's pension will increase by triple-lock, the excess (called the Protected Amount IIRC) over the base level will only increase by something like CPI capped at a low level. It's not blanket triple lock as his starting amount calculated in 2016 was already more than the New SP level.

Good point - I see that it says it here under the heading 'Annual Increases':
The new State Pension: How it's calculated - GOV.UK (www.gov.uk)
It's a pity it doesn't increase by the triple lock, but I understand the same happens if you defer the SP. However I still think that Mr GC is in a very good position with his starting amount above what most people can reach.

GunJack

Audaxer said:

GunJack said:

HAng on......

not all of Mr G-C's pension will increase by triple-lock, the excess (called the Protected Amount IIRC) over the base level will only increase by something like CPI capped at a low level. It's not blanket triple lock as his starting amount calculated in 2016 was already more than the New SP level.

Good point - I see that it says it here under the heading 'Annual Increases':
The new State Pension: How it's calculated - GOV.UK (www.gov.uk)
It's a pity it doesn't increase by the triple lock, but I understand the same happens if you defer the SP. However I still think that Mr GC is in a very good position with his starting amount above what most people can reach.

the split increases (such as in mr G-C's case) will be less of an issue with CPI being so high, that effectively it'll be CPI on all of it. In most of the previous years since it's introduction in 2016, with low CPI it did mean that the Protected Payment element did hardly increase e.g. when CPI was 0.5%, the PP element would only increase by 0.5%, even if the base amount went up by 2.5%. 

IIRC it did cause some confusion for some people...

Silvertabby

Albermarle said:

Grumpy_chap said:

I'm amazed that politicians haven't done a better job of explaining the universal scope of Triple Lock.

Yes, you are right. Although state pension increases for the future, will probably be of little interest to the majority of the population ( either too young or uninterested in pensions/personal finance as most people are ) . It could be a vote winner for some over 50's if it was promoted more and this age group will tend to vote as well.
They seem to be missing a trick !

In theory, it could benefit everyone from age 20 onwards.  Even 10% on a State pension accrual of £10 per week is worth having.

Going forward, most people will hit the full single tier pension by their 50s, so the continuing triple lock will be a huge boost to them.

Perhaps the thinking is that if the money isn't in their pockets - now - then it doesn't exist.

NedS

Silvertabby said:

Albermarle said:

Grumpy_chap said:

I'm amazed that politicians haven't done a better job of explaining the universal scope of Triple Lock.

Yes, you are right. Although state pension increases for the future, will probably be of little interest to the majority of the population ( either too young or uninterested in pensions/personal finance as most people are ) . It could be a vote winner for some over 50's if it was promoted more and this age group will tend to vote as well.
They seem to be missing a trick !

In theory, it could benefit everyone from age 20 onwards.  Even 10% on a State pension accrual of £10 per week is worth having.

Going forward, most people will hit the full single tier pension by their 50s, so the continuing triple lock will be a huge boost to them.

Perhaps the thinking is that if the money isn't in their pockets - now - then it doesn't exist.

Agreed, I'm in my 50's and knowing we have not far off £20k of triple-locked SP between us (in today's money) coming at 67 gives us a really solid financial base in retirement.

resk

Silvertabby said:

Albermarle said:

Grumpy_chap said:

I'm amazed that politicians haven't done a better job of explaining the universal scope of Triple Lock.

Yes, you are right. Although state pension increases for the future, will probably be of little interest to the majority of the population ( either too young or uninterested in pensions/personal finance as most people are ) . It could be a vote winner for some over 50's if it was promoted more and this age group will tend to vote as well.
They seem to be missing a trick !

In theory, it could benefit everyone from age 20 onwards.  Even 10% on a State pension accrual of £10 per week is worth having.

Going forward, most people will hit the full single tier pension by their 50s, so the continuing triple lock will be a huge boost to them.

Perhaps the thinking is that if the money isn't in their pockets - now - then it doesn't exist.

You may well be right.  It's pretty common to see people on personal finance forums in their 20s/30s/40s confidently stating that the state pension either won't exist or will be means-tested when they're old enough to get it.  I suppose once you get to your 50s, state pension age starts to become a bit more real!  There's a similar attitude to DC pensions which sometimes results in self-defeating behaviour - I can imagine that if you've told yourself your whole working life that "I can't trust the big bad government not to steal my pension, so I'm opting out", once you hit 50 and you're five years away from accessing what could have been a much bigger pot, maybe some regret might start to kick in.....   

Grumpy_chap

Thank you for the excellent comments, we've gained a big increase in understanding, particularly the value of the state pension.

I would like to understand something about the state pension forecast.  My forecast is:

Grumpy_chap said:

Your forecast is £196.35 a week, £853.77 a month, £10,245.26 a year
£196.35 is the most you can get You cannot improve your forecast any more.
Your National Insurance record You do not have any gaps in your record. 

Mrs G-C's forecast is:

Grumpy_chap said:

Your forecast is £185.15 a week, £805.07 a month, £9,660.86 a year
£185.15 is the most you can get You cannot improve your forecast any more.
Your National Insurance record You have 2 years when you did not contribute enough

Then, it does seem as though Mrs GC has some COPE:
You’ve been in a contracted-out pension scheme Like most people, you were contracted out of part of the State Pension
Contracted Out Pension Equivalent (COPE) Your COPE estimate is £3.29 a week

My reading of that is that with the contributions we have made to date, then we will receive the £10k each with the uplifts as per whatever future / on-going triple lock is applied and then we will get our pensions from state pension age, which I think is 67 or thereabouts unless the rules change in the meantime.

I read it that if we were to both stop working tomorrow and never work again (hypothetically), the fact we would not be making further NI contributions would not impact the level of state pension we would receive.

That sort of makes some sense as it is possible to retire and draw personal pension from when we reach age 55, so there will be some people that do so and certainly cease NI contributions at that age.  Well before state retirement age.

Now, someone else has mentioned to my wife that the state pension forecast assumes you will continue to accrue qualifying years in future to state retirement age.  That is at odds with what I have understood from this thread.  I think the someone else is incorrect, but the someone else has DipPFS so should know what they are talking about.

My logic for the someone else being  incorrect is that if an individual chooses to retire at age 55 and draw personal pension, they are not working, so have no earned income, so cease paying NI but state pension age remains several years away.  That individual retiring at age 55 does not continue to accrue qualifying years.

I have assumed that the rules that allow early retirement from age 55 do not also widely result in losing out on state pension.  That also aligns with my understanding that you need 35 years of NI to get full state pension so start work at 20 and that means you are there by 55.  Almost like the Government wrote the rules to actually work in a joined up way (but I won't make a habit to assuming that).

Mrs G-C is of the view that the someone else has qualifications DipPFS and knows so I am incorrect.  That is understandable, but in this case it looks as though the someone else made a mistake, or provided an answer based on partial information.

Can anyone clarify?

QrizB

Grumpy_chap said:

Thank you for the excellent comments, we've gained a big increase in understanding, particularly the value of the state pension.

I would like to understand something about the state pension forecast.  My forecast is:

Your forecast is £196.35 a week, £853.77 a month, £10,245.26 a year
£196.35 is the most you can get You cannot improve your forecast any more.
Your National Insurance record You do not have any gaps in your record.

Mrs G-C's forecast is:

Your forecast is £185.15 a week, £805.07 a month, £9,660.86 a year
£185.15 is the most you can get You cannot improve your forecast any more.
Your National Insurance record You have 2 years when you did not contribute enough

My reading of that is that with the contributions we have made to date, then we will receive the £10k each with the uplifts as per whatever future / on-going triple lock is applied and then we will get our pensions from state pension age, which I think is 67 or thereabouts unless the rules change in the meantime.

I read it that if we were to both stop working tomorrow and never work again (hypothetically), the fact we would not be making further NI contributions would not impact the level of state pension we would receive.

Can anyone clarify?

In the case of Mr G_C, the as your forecast is £196.35pw (more than the nominal full NSP of £185.15 a week) you must already have made all the NI contributions required to qualify for that pension.

For Mrs G_C the situation is different. Her forecast of £185.15 and she can't increase her forecast but that doesn't mean she's already entitled to that amount. It's a forecast not necessarily a nowcast.

Does it say, on the forecast page, "you need to continue to contribute National Insurance to reach your forecast"?

Like this example (uses last year's rates, but the layout hasn't changed):

xylophone

Now, someone else has mentioned to my wife that the state pension forecast assumes you will continue to accrue qualifying years in future to state retirement age.

If your wife needs to continue to contribute to reach a full NSP, then her forecast will say so.

See above.

In your case, at 6/4/16, (inception of NSP),   you had already accrued a "starting amount" that was higher than a full NSP.

Therefore, although (if working and earning the relevant amount) you would still need to pay NI, it would not add to your pension.

That part of your "starting amount" that represented a full NSP (£155.65 at 6/4/16) would increase (pre and post SPA) by the triple (currently double) lock and the amount over a full NSP (the "protected payment") by CPI.

This is what the government produced as an introduction to the proposed NSP.

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

Grumpy_chap

So, Mrs G-C is going to make a payment into her People's Pension of the £2,880 (to be grossed up to £3,600) that is allowed whether or not she has eligible earnings.

She sent an e-mail asking how to do this, to B&CE (which is the address from which the People's Pension statement comes from).
They sent a form that had to go by post so that she would be sent the payment details.
She now has an e-mail from peoplespartnership purporting to be from People's Pension and giving her some account details to make the payment to by BACS.

Does anyone know whether this is genuine?  The peoplespartnership, or a luckily-timed scam / interception of the form.

It seems quite poor practice that the People's Pension don't just work under one name but have a whole collection of names that they operate under.
A year's pension contribution is more than anyone can afford to lose if the details are incorrect.
It all seems quite unprofessional for The People's Pension to operate under all these different names and to need stuff done in part by post, in part by e-mail.  A secure online portal would be better but they don't seem to have that.

xylophone

See  https://thepeoplespension.co.uk/workplace-pension-contributions/#paying-more-into-your-workplace-pension

There is a link  in the above to this form.

https://thepeoplespension.co.uk/wp-content/uploads/TPP-FO-0023.0522-Personal-payments-form_v5.pdf

You will note (bottom of page 2)

Please return your completed form to: Freepost THE PEOPLES PENSION

Or send it to us by email at personalpayments@peoplespartnership.co.uk, though emails aren’t considered a secure way of sending us your information.