Missold State Pension Top up?
Options
Comments
-
Hi All,
HMRC knew my husband qualified for the top ups and I had told them I was 25 years younger than he. When I asked if I would receive them on his death and they said yes I would but could HMRC not have said 'but only on reaching pensionable age yourself? I made several phone calls to several persons saying the above but no-one said anything about having to reach pensionable age first.
Could someone tell me how big a blunder this is? I calculate 10 life years for spouse and 5 live years for me (post-pensionable age) and we get our money back and it does save the ~£18K from the ravages of inflation. However, missed opportunity costs (such as putting it in stocks and shares etc) must be something. How much have I cost myself?
Best wishes,
Jennifur0 -
jennifurroberts wrote: »Hi All,
HMRC knew my husband qualified for the top ups and I had told them I was 25 years younger than he. When I asked if I would receive them on his death and they said yes I would but could HMRC not have said 'but only on reaching pensionable age yourself? I made several phone calls to several persons saying the above but no-one said anything about having to reach pensionable age first.
Could someone tell me how big a blunder this is? I calculate 10 life years for spouse and 5 live years for me (post-pensionable age) and we get our money back and it does save the ~£18K from the ravages of inflation. However, missed opportunity costs (such as putting it in stocks and shares etc) must be something. How much have I cost myself?
Best wishes,
Jennifur
The unhappy reality is that it depends what you asked. HMRC would simply argue that the relevant information was readily available in the public domain and it isn't their role to give any sort of advice. The other possibility is that someone did say it, but if it was a throwaway snippet such as 'at SPA', it might not have registered with you if you were focused on other parts of their answer.
Impossible to know what else you might have invested in and what the outcome could have been, so there really is no way to calculate how much your action (which isn't necessarily a blunder) 'cost'.0 -
No point in worrying, what's done is done and cannot be undone or changed. Best to be looking forwards....:)The questions that get the best answers are the questions that give most detail....0
-
jennifurroberts wrote: »How much have I cost myself?
As it stands, nothing, as neither of you have died prematurely. And if you don't both die prematurely, a return of 7.2% per annum guaranteed for life with inflation linking (even with the capital lost on death) is an outstanding deal, one that you can't get anywhere else. The 6.5% you would inherit from him is still an outstanding deal.
If he dies now and you end up with a 6.5% inflation-linked annuity deferred for 25-odd years (you haven't stated your actual ages), that's not as good, but still isn't a bad deal based on the level of growth you would need to buy the same income on the open market in 25 years' time.
If both of you die prematurely (which is the only way you can actually lose the £18k), I would suggest coming back then and asking us to help calculate your loss.0 -
The calculations of the amount payable was actuarially neutral, and cost significantly less than available for a comparable product in the open market at the time. In your circumstances on average you would be on the 'benefit' side of the averaging, assuming you meet the expected lifetimes. IIRC it was only a poor deal for those with known ailments that would have impaired life expectancy, especially if single, where using the capital or possibly an enhanced annuity would have been better. What would also come into the equation for you would have been making payments into a pension for yourself.0
-
The best "product" available to people with an SPa before 6th April 2016 was generally deferral of the state pension in preference to the Class 3a top up.The calculations of the amount payable was actuarially neutral, and cost significantly less than available for a comparable product in the open market at the time.
HMRC would not have told claimants of this either though.
This, however, also does have the case whereby if the pensioner dies before the younger spouse reaches SPa there is a gap in the pension. It may be more obvious in these circumstances though.0 -
There certainly was a hierarchy of various options to look at on the SP/NI side too, depending on specific circumstances. That is what an IFA ought to have been able to advise on.0
-
"I have enquired from yourselves as to whether I was mis-sold PPI and you have replied via email and I quote "you haven't raised a mis-sale complaint yet" so I am now doing so."
Malthusian,
I lol at this line of yours and read it to my spouse. Thank you.
I have thanked nearly everyone who has posted. I post (for other things) on other forums but for sheer helpfulness this has really surprised me.
All this is new to me (financial planning) and hence my ignorance of various subtleties.
I would also like to thank the poster who asked me to purchase insurance against the early death of my husband.
If anyone of you posted anything of significance and I have not singled it out for comment or praise please do not be offended but pity my lack of judgement.
Again, many thanks everyone.
Best wishes,
Jennifur0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608K Mortgages, Homes & Bills
- 173.1K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards