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IanSt wrote: »
I assume many of those 45 years were when you were in a contracted out pension scheme, so you were paying less in national insurance contributions than someone on the same pay who was not.
I take it that you would not count it as fair if someone paying a smaller amount of national insurance got the same benefits as someone paying the full amount.
hogweed wrote: »
Thanks people – that’s very useful. I knew I was being stitched – just no necessarily by whom.
Worse than that – I’ve just been told by HMRC or whatever they call themselves that, despite my having 45 years’ paid up NI contributions, I have to give them another something like £1500 to get the full state pension.
The only consolation is that it’s a long time since anybody even bothered to try and maintain the illusion of fairness in our society, so I don’t expect it
hogweed wrote: »
Well, as I understand it, everybody gets the same basic state pension as long as their employer pays their NI contributions – so somebody earning £15k a year for life gets the same as somebody who earns £50k.
Are you telling me I’m wrong about this??
“ Well, as I understand it, everybody gets the same basic state pension as long as their employer pays their NI contributions – so somebody earning £15k a year for life gets the same as somebody who earns £50k.
Are you telling me I’m wrong about this??Originally posted by hogweed
xylophone wrote: »
Well, from the previous link, you will see how indexing works on the old state pension (but you will also note the situation of those who ended up with a COD greater than their ASP).
With regard to the new state pension, I think we've already been in discussion about how the "starting amount" was calculated.
If you come under the NSP, then all of your pension up to a full NSP is index linked (currently) under the triple lock - any amount over is a "protected payment" and is index linked under CPI.
Clearly, there is some ASP within the NSP and to the extent that this is the case, under the triple lock the pensioner is getting at least CPI or better.
The same comment as above applies as regards CPI/RPI though!
Those worst affected by the change to the NSP were those occupational pensioners with a GMP who were very close to SPA at the time of the changeover.
They may well have had high COD/COPE which meant that they received much less than a full NSP with no chance to improve their starting amounts.
They would then miss out on indexation of pre 88 GMP altogether and would receive only up to 3% on post 88 GMP through their occupational schemes.
Those in receipt of Public Service Scheme pensions have been protected from this (at least up to those retiring in 2021).
Thankyou. I think I understand this now. So, under the nSP, those with GMP who are also able to qualify for the full amount before SPA, will effectively replace their GMP indexation with CPI indexation on a higher basic SP. This is achieved by the opportunity to accrue basic SP beyond what they would otherwise have received under the old system.
Therefore, those who had a high GMP at the starting point (and a correspondingly high COPE amount) could have their starting amount reduced to a point where it is impossible to increase their basic nSP (which is all index-linked) up to the equivalent of the extra pension they will receive from the GMP scheme (which is zero or max 3% index-linked). The difference will not be index-linked. Is this correct?
Also, what happens to those whose who accrued pre 88 GMP but whose starting amount was more than the max nSP? Typically, these people would have been contracted out early in the working lives and then contracted in for a substantial period more recently when they enjoyed higher earnings. The high ASP they had accrued under the oSP is protected and is all index-linked. However, under the oSP, they would also have received an additional amount p.a. as indexation of their GMP. Have these people now foregone indexation on this additional amount?
So, in the most extreme example, those who were very close to SPA when the nSP was introduced, and were contracted out throughout their working lives (and were not members of public schemes), will not receive indexation (or full indexation) on their equivalent of ASP (i.e. the GMP).
However, those who were contracted-in for the same period (and are the same age) will receive triple lock up to the max nSP and then CPI on the amount above that?
This transition period is a minefield.
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