GMP and state pension

Dazed_and_C0nfused

Silvertabby said:

Contrary to popular belief, it's the ones who 'only' needed 26/28 years of NI to reach the full new single tier pension who are the losers under the new scheme.

They were obviously contracted in (to SERPS/SP2), and had been accruing high levels of additional State pension.  Until that all stopped in 2016.  Had the rules not changed, they would have continued accruing additional pension until SPA, when their total State pensions could have been way over £300 per week.  Instead of being capped at £230 a week or not much more.

I know it's down to a basic lack of  understanding of how pensions work, but I find it strange that all the complaints I've seen on these and other boards are from those with substantial contracted out service, meaning they never reached the dizzy heights of the new single tier pension, or had to pay 40 odd years of NI to get there.  Yet I can't recall a single complaint from someone with less than 30 years who has missed out on post 2016 SP2 accruals.

I agree it's very odd.  Most people who complain are what most people would consider winners under the new system.  Paid reduced NI for a long period whilst building up a nice DB pension 

And then have the opportunity to increase their expected "basic" State Pension to the significantly more generous (in £ terms) "new" State Pension.

Silvertabby

Dazed_and_C0nfused said:

Silvertabby said:

Contrary to popular belief, it's the ones who 'only' needed 26/28 years of NI to reach the full new single tier pension who are the losers under the new scheme.

They were obviously contracted in (to SERPS/SP2), and had been accruing high levels of additional State pension.  Until that all stopped in 2016.  Had the rules not changed, they would have continued accruing additional pension until SPA, when their total State pensions could have been way over £300 per week.  Instead of being capped at £230 a week or not much more.

I know it's down to a basic lack of  understanding of how pensions work, but I find it strange that all the complaints I've seen on these and other boards are from those with substantial contracted out service, meaning they never reached the dizzy heights of the new single tier pension, or had to pay 40 odd years of NI to get there.  Yet I can't recall a single complaint from someone with less than 30 years who has missed out on post 2016 SP2 accruals.

I agree it's very odd.  Most people who complain are what most people would consider winners under the new system.  Paid reduced NI for a long period whilst building up a nice DB pension 

And then have the opportunity to increase their expected "basic" State Pension to the significantly more generous (in £ terms) "new" State Pension.

I have a friend who is in a very similar situation to me - a LOT of contracted out service/very nice DB pensions and enough time between 2016 and SPA to be able to top up our State pensions to the full single tier level.

As we both retired before SPA, I did that by paying 4 years of voluntary Class 3s, but my friend won't do that on the grounds that 'she's paid enough in, and the Government isn't getting a penny more'.  Yet she is still complaining about the 'unfairness' of not getting the full nSP.

pinnks

Silvertabby said:

Dazed_and_C0nfused said:

Silvertabby said:

Contrary to popular belief, it's the ones who 'only' needed 26/28 years of NI to reach the full new single tier pension who are the losers under the new scheme.

They were obviously contracted in (to SERPS/SP2), and had been accruing high levels of additional State pension.  Until that all stopped in 2016.  Had the rules not changed, they would have continued accruing additional pension until SPA, when their total State pensions could have been way over £300 per week.  Instead of being capped at £230 a week or not much more.

I know it's down to a basic lack of  understanding of how pensions work, but I find it strange that all the complaints I've seen on these and other boards are from those with substantial contracted out service, meaning they never reached the dizzy heights of the new single tier pension, or had to pay 40 odd years of NI to get there.  Yet I can't recall a single complaint from someone with less than 30 years who has missed out on post 2016 SP2 accruals.

I agree it's very odd.  Most people who complain are what most people would consider winners under the new system.  Paid reduced NI for a long period whilst building up a nice DB pension 

And then have the opportunity to increase their expected "basic" State Pension to the significantly more generous (in £ terms) "new" State Pension.

I have a friend who is in a very similar situation to me - a LOT of contracted out service/very nice DB pensions and enough time between 2016 and SPA to be able to top up our State pensions to the full single tier level.

As we both retired before SPA, I did that by paying 4 years of voluntary Class 3s, but my friend won't do that on the grounds that 'she's paid enough in, and the Government isn't getting a penny more'.  Yet she is still complaining about the 'unfairness' of not getting the full nSP.

I retired at 60 with a nice DB pension, and paid 5 years voluntary NI, but ran out of time to achieve the new maximum, so am short by just over £1 per week (not that it would have been worth paying a 6th year to get that final amount even if I could have!).  I should break even after 2 years 5 weeks (pre tax).  Never ceases to amaze me that people take the attitude of your friend!
  

GunJack

What I don't get is that a lot of people like that are usually intelligent, been in professional careers, and yet they still have basic misunderstandings of the way things work....highly frustrating!!

Silvertabby

GunJack said:

What I don't get is that a lot of people like that are usually intelligent, been in professional careers, and yet they still have basic misunderstandings of the way things work....highly frustrating!!

I know, but my friend is never wrong....

I bought my 4 years of Class 3s 4 years ago so, in round figures, I paid £3K for an extra £20 per week State pension.  According to my friend, £3K for just £20 was a very poor return for my investment.  Yes, I did stress that £20 a week was £1K a year, but she couldn't get past the 'just £20'.

After accounting for 20% tax and the two mega triple lock increases we have had in this time, I reach my break even point in less than 3 months, after which it's all profit.

But she still says that there's no way she would willingly pay the Government a penny more than she had to.