MSE News: Government outlines flat-rate state pension

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
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  • jamesdjamesd Forumite
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    Two different rates.
  • zagfleszagfles Forumite
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    I retired at 60 on two final salary pensions because I thought ahead in my younger days.
    So you weren't self-employed? So why do you think you'll be worse off by missing the cut-off date? Most people who were employed won't get any more under the new state pension system.
  • I was born on 1st August 1952 and have worked for 44 years I will be entitled to draw my state pension on 6th November 2014 approx £110 per week. Anybody who retires from 5th April 2016 will receive £144 per week. Can anyone tell me how this is fair?
  • jem16jem16 Forumite
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    I was born on 1st August 1952 and have worked for 44 years I will be entitled to draw my state pension on 6th November 2014 approx £110 per week.

    What happened to your entitlement to SERPS/S2P? Were you in a contracted out scheme?
    Anybody who retires from 5th April 2016 will receive £144 per week. Can anyone tell me how this is fair?

    I retire after this date and will not receive the £144.
  • Yes I was contracted out.
    How come you won't get the £144?
  • jem16jem16 Forumite
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    Yes I was contracted out.
    How come you won't get the £144?

    For the same reason that you wouldn't if your retiral date was after the new state pension comes in.

    Those who have been contracted out for all of their working life will have a deduction placed on the flat pension which will bring it back down to the same level as the current basic pension.
  • zagfleszagfles Forumite
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    Seems there's an incredible amount of ignorance about the state pension changes. Perhaps people should read and understand the white paper before whinging: http://www.dwp.gov.uk/policy/pensions-reform/state-pension/
  • dampsquibdampsquib Forumite
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    There’s going to be an awful lot of disappointed pensioners about after the new flat-rate pensions start. After hearing the headlines, most people perceive that all ‘new’pensioners are going to benefit from much bigger state pensions.
    The two main disappointed groups are going to be:
    • Existing pensioners who think (incorrectly) that younger relatives and neighbours are benefitting from much bigger pensioners than they receive, and
    • New ‘contracted-out’ pensioners, who start receiving not much more than the old-system state pension.
    Shame that the new scheme isn’t getting implemented before people vote in the next election.
  • jamesdjamesd Forumite
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    Or perhaps not a shame, since it'll give a chance for people to vote based on this raid on working people's pensions.

    The main disappointed group longer term is likely to be middle aged and younger people who will lose a substantial amount of state pension, so the first thing that all of their pension investing will have to do is make up for what's been taken from them.
  • edited 19 March 2013 at 1:00PM
    wakeupalarmwakeupalarm Forumite
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    edited 19 March 2013 at 1:00PM
    I was born on 1st August 1952 and have worked for 44 years I will be entitled to draw my state pension on 6th November 2014 approx £110 per week. Anybody who retires from 5th April 2016 will receive £144 per week. Can anyone tell me how this is fair?

    Yes I was contracted out.

    Your contracted out pension is likely to be more than any S2P you gave up by contracting out, and more than the £34 difference between the £144 and your state pension of approx £110.

    The flat rate pension isn't an increase on the basic state pension amount, its a cap on the total state pension at a couple of pounds above the means tested pension guaranteed credit amount.

    Very few groups of people win under the new system, the self-employed are one, the majority especially the young loose massively.

    Someone starting out now under the new system with the same 44 year work history as you when they retire will receive a maximum of £144 state pension.

    If you add your Aprrox £110 state pension with your contracted out pension, after 44 years working your pension is likely to be substantially more than £144.
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