Old v New state pension

xylophone

£327.75 that "old" pensioners could get

Possible for some, largely those who were relatively high earners and contracted in to SERPS/S2P for much of their working lives.

There will be those on the new scheme whose  state pension will be well in excess of full NSP, particularly those who had been largely contracted in and reached SPA shortly after inception of NSP.

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

wolvoman

militarymick said:

Thanks for your comments folks, no I didn't serve directly in the military. 
Yes it's a complex system but rest assured those on the old pension inclusive of Serps etc.etc. do not, on average receive a payment approaching the new Pension.
     The main bone of contention is % rises ever increase the chasm between the two pensioner groups.Our costs and expenses are indentical, so in fairness the two groups should receive an increase in £s rather than % which leads to such an ever increasing divide IMO

The divide is increasing at the rate that pensions are increasing, which happens to be CPI inflation.

If the gap between the two was equated to 10 pints of beer, how would it be fair if  next year the gap was 9 pints?

LHW99

The main bone of contention is % rises ever increase the chasm between the two pensioner groups.Our costs and expenses are indentical, so in fairness the two groups should receive an increase in £s rather than % which leads to such an ever increasing divide IMO

And that's what happens with wages too. The gap between the managers and the bottom end keeps getting bigger, except that the percentage divide remains (largely) the same

Bogof_OAP

I understand and agree with the OP, being in the same position.  Even more so as I reached SPA at a couple of weeks short of  age 62 (I'm female) so missed out on both aspects of the calculations.  I now receive about £25 a week less than my sister who is less than two years younger than me, although granted she had to wait until she was 65 for hers.

I'm philosophical about it in that I did have an extra three years of claiming, and the break even point will come if I live to claim for about 17 years, which I hope to do!  My S2P amount is in the region of 75p a week, which hasn't changed for the past several years, so I am definitely in the worst of all worlds group.  But hey that's life.

QrizB

militarymick said:

Yes it's a complex system but rest assured those on the old pension inclusive of Serps etc.etc. do not, on average receive a payment approaching the new Pension.
     The main bone of contention is % rises ever increase the chasm between the two pensioner groups.Our costs and expenses are indentical, so in fairness the two groups should receive an increase in £s rather than % which leads to such an ever increasing divide IMO

And

Bogof_OAP said:

My S2P amount is in the region of 75p a week, which hasn't changed for the past several years, so I am definitely in the worst of all worlds group.  But hey that's life.

As has been stated by Silvertabby, if your income is more than a few pence less than the New State Pension you're likely to be eligible for Pension Credit - which brings with it a substantial bundle of other entitlements.

It's pensioners with the full NSP and no other income who are likely to be the hard done by ones.

xylophone

My S2P amount is in the region of 75p a week, 

Were you contracted out?

Bogof_OAP

xylophone said:

My S2P amount is in the region of 75p a week, 

Were you contracted out?

To be honest I have no idea.  I was on a (initially) non-contributory final salary pension scheme in the private sector, and took little notice of such details at the time.  It became contributory a few years before I took very early retirement at 50 on voluntary redundancy (there were other reasons, ageing parents being the main one), but the contributory amount was negligible so again I took little notice.  Husband worked in same firm so I just assumed we'd manage between us.  I know it's shameful to admit, but that's the way it was.  

Prior to my main 30 years employment I had a couple of short term jobs, one from age 17 to 21, which may or may not have created the tiny additional amount.  Again at that age I wasn't really bothered about such things, as per most of my married female contemporaries at the time.  I don't remember ever having a conversation about pensions apart from a minor disgruntlement when we were told we would have to start contributing.

No entitlement to Pension Credit, nor would I want any, as I have quite a comfortable amount of savings/inheritance as well as my work pension and state pension, we're not rich but can manage fine.  I was just commenting in relation to the OP's point which I have often thought about, particularly given the discrepancy with my sister's state pension amount, although I accept that there had to be a cut-off point somewhere.

german_keeper

militarymick said:

Thanks for your comments folks, no I didn't serve directly in the military. 
Yes it's a complex system but rest assured those on the old pension inclusive of Serps etc.etc. do not, on average receive a payment approaching the new Pension.
     The main bone of contention is % rises ever increase the chasm between the two pensioner groups.Our costs and expenses are indentical, so in fairness the two groups should receive an increase in £s rather than % which leads to such an ever increasing divide IMO

Genuine question mick, do you understand exactly how the old system and the new system work? Do you understand contracting out in the old system, how that affected the level of NI contributions, and in particular what the benefits were of being in a position where you were contracted out? Do you understand what SERPS and S2P were?

When rules for benefit entitlements  change there are generally people who can be perceived to be winners and losers. If you look at the introduction of Universal Credit there are millions of people who are apparently better off and millions worse off  compared to the old system. When the "losers" have to change to the new system they are guaranteed to stay on the rate of the old system on a "mark time" basis until their entitlement under the new system catches up. In my opinion they may have reason to expect a "campaign" on their behalf.

There are a group of people who have a reasonable argument to deserving a "campaign" under the new state pension rules. But these aren't the people who only receive the basic state pension because they have been contracted out, but the ones who weren't ever contracted out. Firstly they were paying 1.4% more NI in the old system, and secondly anyone who had built up sufficient SERPS/S2P to be at or above the level of new state pension in 2016 has been paying NI since then with their state pension on a "mark time" basis. The reason they don't really have a case for a campaign is that NI is not paid just for State pension purposes, it pays towards lots of other things. But as someone who benefits greatly from the new rules I have an awful lot of sympathy for their situation. 

squirrelpie

LHW99 said:

And that's what happens with wages too. The gap between the managers and the bottom end keeps getting bigger, except that the percentage divide remains (largely) the same

Err, no it hasn't. The gap between the chiefs and the indians has widened very considerably over time and continues to do so, in percentage terms as well as numerical.

Bogof_OAP

Can't speak for Mick, but I freely admit I don't understand any of the intricacies of pensions...  I wonder how many everyday people actually do...

"Genuine question mick, do you understand exactly how the old system and the new system work? Do you understand contracting out in the old system, how that affected the level of NI contributions, and in particular what the benefits were of being in a position where you were contracted out? Do you understand what SERPS and S2P were?"