MSE News: Government outlines flat-rate state pension

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
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  • I believe I could lose out big time.
    I was born in 1952 and will receive my Sate Pension in 2015 and so will miss out on the single tier pension in 2016.
    Also with changes to Pension Credit in October this year and having a husband who is just over two years younger than myself, if he were to lose his job he would then have to claim Universal Credit.
    My husband will receive his £144 Pension when he is 66 years old in 2021 when I will be 68 years old. So we could be a couple living on my pension alone (forecast at £128) until then.
    Where is the dignity for pensioners that this government talk about?
  • srcandassrcandas Forumite
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    Where is the dignity for pensioners that this government talk about?

    But you will not be pensioners; you will be a pensioner and a person who should be working.

    If unemployment is a problem there is help available.

    I appreciate you may have been very unlucky in life but why do you have no provision for this?

    Yeah we all would like a world where the old were well cared for but unfortunately someone has to pay :)

    ps: Said as someone who plans to try and work until 67 despite private pension provision supporting those in my family unlucky enough to be unemployed or needing a decent education - and happy to do so - well I still moan every now and again ;)
    I believe past performance is a good guide to future performance :beer:
  • jamesdjamesd Forumite
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    So we could be a couple living on my pension alone (forecast at £128) until then.
    Where is the dignity for pensioners that this government talk about?
    Where it belongs: with you and your husband for failing to prepare for retirement. The government isn't primarily responsible for that, you are.

    You'll be entitled to means tested benefits of various sorts to top up your income to an appropriate minimum level for those who fail to provide for themselves. Please do ensure that you both apply for them, they are there to be used to help those in need.

    It's far from certain that your husband will receive £144. Someone who worked a full working life even on minimum wage would end up with around £190 a week, not £144.

    You still have a chance to improve your position. You can work and accumulate extra state pension. You can not claim your state pension and get an extra 10.4% for each year of deferral, pro-rated for less. It takes about 3.5 years of deferring to get from a full basic state pension to £144 a week. Your husband and your savings can cover for the state pension you're not getting while you're waiting for it to increase.
  • It's not about dignity or fairness, it's about reducing the state pension bill whilst claiming to offer everyone a better deal. They are basically reducing future pension accrual when the working age span is increasing. They are putting the £144 as a figure where under the old system you would get perhaps £50 a week more. You have to work an extra 5 years for this, up from 30 years. Despite this your probably going to be working to 68 or 70 at least. The new NI rules may mean more final salaries close or reduce benefits. Read between the lines, this new pension is a mugging. You can pay into a stakeholder or auto end pension, you will probably need a pot of£100000 to get just around £5000 a year. Huge sums to get a small annuity back. Hand on heart, do you think annuities will ever be any good again?
  • zagfleszagfles Forumite
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    It's not about dignity or fairness, it's about reducing the state pension bill whilst claiming to offer everyone a better deal.
    And the spin really has worked well! Just look at this thread, people up in arms because they think they're missing out on this great new scheme!
  • edited 23 March 2013 at 12:34AM
    taktikbacktaktikback Forumite
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    edited 23 March 2013 at 12:34AM
    As a typical working life will be 50+ years in the future -you will be paying 15+ years of additional national insurance for absolutely nothing. That's just a tax increase.

    The only people who's extra NI will count (and only for the short term..) are those lucky enough to have been contracted out for extensive periods of time...

    Basically, the entire earnings related portion of the state pension has been swept away for a maximum additional payment of £37 pw -and all of your additional NI contributions go to someone else - someone else who most likely would have have received pension credit - paid for by guess who - you...so who gets the benefit of those savings - er - yep that'll be the government...

    You've got to hand it to them - It's the great rock'n roll swindle....
  • ekeirekeir Forumite
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    zagfles wrote: »
    And the spin really has worked well! Just look at this thread, people up in arms because they think they're missing out on this great new scheme!

    I think that a lot of people want into the scheme because, like myself, they believed the hype. Apparently the only difference it is likely to make to me is that three years before pensionable age they have decided I will need to have paid 35 years nic's instead of 30.
    I do understand that with the country in debt and the average age of the population increasing they have to do something but it would have been better if the goverment was upfront about it instead of making out they are doing pensioners a favour.
  • exilexil Forumite
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    I'm not in the habit of defending the government but in this case it was made clear that the changes would be "revenue neutral" so there would inevitably be losers as well as winners. No-one, however, should lose any entitlement already accumulated.
  • well -it depends how you look at it..

    I had 16 years contracted out until 2002, then have been contracted in for the last 11...that's not enough to be above the £144 -but it does mean that from 2016 until my state pension date of 2027 I have 11 years to get back from £107 to £144

    So basically the last 13 years contracted in payments have not benefited me one jot...I should have stayed contracted out...you could argue that I have "lost an entitlement already accumulated" in a round about way...

    but then hindsight is a wonderful thing
  • gadgetmindgadgetmind Forumite
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    taktikback wrote: »
    So basically the last 13 years contracted in payments have not benefited me one jot.

    Same here (but "only" eight years of NI wasted) however you make decisions based on information available at the time, so no regrets. I'm just glad I have £60k+ in my PP as a result of the years that I was contracted out and my wife also has a few bob to show for hers.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
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