NI contributions

RogerPensionGuy

eastcorkram said:

I'd imagine, overall, the two on the 'lower' amount, will be better off, once they get their DB pension into payment.

The post above is 100% correct, the 235ers would be very happy to swop 💺 💺 with the 205ers.

And the two 205ers would like to pay extra NI years to achieve 235ish and thus allowing a more flexible approach to augmenting their DB and DC possibilities. 

I learned a lot today, tks posters.

Cheers Roger. 

Qyburn

RogerPensionGuy said:

It's a shame they don't just let anyone top up to that maximum £235-zone if they want and can achieve it.  

There's no "maximum £235". That's not the maximum that could have been earned before 2016, which I think could be over £300 for a high earner who never contracted out. 

Silvertabby

Qyburn said:

RogerPensionGuy said:

It's a shame they don't just let anyone top up to that maximum £235-zone if they want and can achieve it.  

There's no "maximum £235". That's not the maximum that could have been earned before 2016, which I think could be over £300 for a high earner who never contracted out. 

Current maximum 'old' State pension is something like £330 per week.  More if the pensioner deferred payment, at the old - much more generous rate - of over 10% per year.  

A neighbour's State pension is something like £24K per year, due to his high SERPS/SP2 accrual and 5 years of deferment.  I won't repeat what he says when he hears calls from 'new' pensioners for the State pension to be changed to the nSP (£10,600 per year) for ALL pensioners. 

Going forward, the maximum State pension plus 5 years of deferment will be less than £14K per year.  So much for the new pension scheme being more generous than the old! 

Qyburn

Silvertabby said: 

Going forward, the maximum State pension plus 5 years of deferment will be less than £14K per year.  So much for the new pension scheme being more generous than the old! 

I don't think it was ever intended to be more generous to the well off. What would you have been earning to clock up £330/week under the old rules?

QrizB

Qyburn said:

Silvertabby said: 

Going forward, the maximum State pension plus 5 years of deferment will be less than £14K per year.  So much for the new pension scheme being more generous than the old! 

I don't think it was ever intended to be more generous to the well off.

It wasn't intended to be "more generous" at all. The new state pension was intended to cost the taxpayer less than the old one did, which peans paying out less than the old one did.

Because of the way it's calulated, there are winners and there are losers. People with SERPS / S2P entitlements that meant they were already at or above the full NSP in 2016 (e. Roger's colleague with a £235pw NSP) are the losers, although they might not realise it.

People who were contracted out but are still able to earn the full NSP are the winners.