General Discussion
Just been looking at various national papers concerning the latest on state pensions. Here's the Daily Mail's article. Read the comments underneath as well.
and/or take a look at the BBC report and online comments.
Just been watching the tv and listening to the debate about this in the House of Commons.
What was not mentioned once in the whole debate and has not been mentioned in any of the media coverage so far, is what is planned for the likes of winter fuel allowance, free prescriptions, tv licences, free bus pass entitlements etc once this new state pension system comes into play in 2017.
Just thought I'd point that out.
@Lynne.the others that you mention are have nothing to do with dwp.this is only about pensions.notice the start date for this,2017.two years after the next general election.three years before the next one,(1 year after the usa chooses a brand new president,thought i mention it).just a reminder!!!!!. anyway,you can imagine the arguments it will cause if they change the others.
Yes, but the others are presently age 60+ benefits so they may yet be affected. Wouldn't have hurt for an MP to have asked about them, just for clarity 'n all that.
By the way. The time for the implementation of this new system has already slipped. Back in 2011 when having a new pension scheme was originally mooted the target date for implementation was 2015. Now it is 2017. I heard the pensions minister this afternoon say something along the lines that 2017 is the target date for implementation. So that target date may shift yet. Those of us who are in our late 50s/v. early 60s need to watch all this very closely. And they've moved the goalposts again in terms of NI years of contribution. It was 30 - now they've made it 35. So what happens if you are in your late 50s, not in paid work, highly unlikely to find paid work, have the 30 years worth of NI but no way of getting the extra 5?
More info: http://www.bbc.co.uk/news/business-11619379
and/or http://www.channel4.com/news/the-new-state-pension-the-key-questions
If the rules end up like the existing pension arrangements you will be able to top up a certain amount of years.
Provided you have the money to do it and you are far enough away from state retirement age to be able to claim back the 'missing' years. For some reason (old scheme)you couldn't buy back the year that you were due to retire in.
My point is, that they've moved the goal posts again!
And, as I understand it. This £144 or equivalent come 2017 will only be payable to those with 35 years worth of NI and who have been paying the extra NI amount for the state 2nd pension.
For those who opted out of S2P and instead paid into an employment scheme (like many coming up to retirement age around about 2017) there is no guarantee, as I understand it, that they will get the full £144 or equivalent thereof.
Government are considering what to do about such individuals apparently.
So, not enough NI contributions and not the right type of NI contributions paid by quite a few late 50/early 60 year olds.
Things maybe not quite as they seem then. Not £144 or equivalent per week. Less than that.
Don't know if the info to be found on this link is of any help to anyone.
If you scroll down this link you should get to the bit that shows due date pension age vis-a-vis date of birth.
http://www.thisismoney.co.uk/money/pensions/article-1679780/New-state-pension-age-retire.html
Note the bizarre differences in dates of birth and state retirement age. For example a woman born 6.01.53 is due for state pension on 6.11.2015 when she is 62 years and 10 months old. Her best friend though, who is exactly 12 month younger being born on 6.01.54, is due for state pension on 6.5.2019 when she is 65 years and 5 months old.
So, although there is only 12 months difference in age there is about 2 and a half years difference between when the first can claim state pension and when the other can.
The other thing of course is that if this 2017 deadline is met for the new proposed state pension then the younger woman will come under it whilst her year older friend will not. Their common denominator though is that they have both recently had their retirement age raised by this present government.
Confused? You try being a woman of a certain age........
(and should you know any women aged, say, 58-61 you might suggest to them that they find out just what it is they will be entitled to and when, as it seems there are even more state pension anomolies for this age range of women than there were this time last week - and there were quite a few then! ).
Suggest people with queries about this (whatever age you might be and whatever your gender cos these new proposals affect all of us aged about 62 and younger) contact our MP, Anne Marie Morris. I say this not only because she is our MP but because crucially she now sits on the Parliamentary Work and Pensions Select Committee and it is that very body that will be scrutinising and analysing the proposals that were put forward by the pensions minister earlier this week.
http://www.parliament.uk/biographies/commons/anne-marie-morris/62737
She's already received three e-mails from me on this subject over the past week! But it would be great if others contacted her as well as I am sure we all have different concerns and now is the time to make 'em known.
And here are some examples of how different people will be affected in different ways. Note in the first example the reference to the fact that if you have opted out of paying the full NI contribution and paid into an occupational pension instead that you will not get the full £144. This really very very important fact keeps being overlooked by most of the media reports.
http://www.guardian.co.uk/money/2013/jan/19/single-tier-state-pension-winners-losers?INTCMP=SRCH
I have emailed Ms Morris with my questions as to the methods used for both the retirement date transfer and the fact that Final Salary Scheme people who have been in contracted out employment and are within 10 years of retirement will receive a state pension payment at todays rates of about £60 per week. A lot less than the £144 full pension. It would seem to me that they are being discriminated against just because their employer has elected to take advantage of reduced NI payments because the company ran a final salary scheme. In the case of most private final salary schemes it is manadatory for the employee to join the scheme, so the employee is now being discriminated against when it comes to state pension.
In addition to all of this the goverment is making shed loads of money from the surpluses held in the pension pot, think of the past schemes, "SERPS" and "Graduated Pension" what happens to all of the monies paid by people to these schemes. From what I have read so far in the 188 page white paper that money seems to disapear
I once saw a figure of £36 billion pounds held in the goverment coffers by Gordon Brown for monies paid in to the pension pot that would never be paid out.
The title of the goverment white paper on this proposed change is "The single-tier pension: a simple foundation for saving". The bit they left off is "by the goverment".
All in all there has to be changes to both the retirement age and the way the state pension is calculated.
People are living longer, when the state pension scheme was set up in 1946 the life expectancy of a man was 68 and for a women it was 69 so not many years for the goverment to payout. Now for men it is 77 and women 81.
The method of claiming the additional pension is too complicated and many people are not claiming the full entitlement. Indeed they are the people who need help to make sure that they claim what is a right by law and not a charity payment that most think it is.
Still lets both see what Ms Morris brings to the table.
Just read in the White Paper -
An individual’s National Insurance record will be valued using single-tier rules as at the implementation of the single-tier pension. Where an individual has previously been contracted out of the additional State Pension, a deduction will be applied, reflecting the fact that they have paid lower National Insurance contributions whilst they were contracted out, as is consistent with current practice.
So that indicates that employees who have been contracted out for many years will not loose out,
There is also protection in the scheme to ensure that people do not loose out if they would have got extra pension due to contributions. They will receive an increase in their foundation amount.
Where an individual has previously been contracted out of the additional State Pension, a deduction will be applied, reflecting the fact that they have paid lower National Insurance contributions whilst they were contracted out, as is consistent with current practice.
Yes, I understand that to be the case. My point is, that the media and government are screaming this headline figure of £144 state pension or equivalent per week implying that is what all people will get as a state pension post 2017 provided they have paid 35 years worth of NI contributions when that is not necessarily the case at all.
I watched a BBC money programme Saturday lunchtime and heard a money 'expert' say that the government had increased the number of years of NI contributions from 30 to 35. He then went on to suggest that people with 30 years NI contributions might wish to buy back the 'missing' 5 years so that they would then qualify for the full £144 or eqivalent per week. No mention at all that the 35 years worth have to be at the higher rate of NI.
That is why I am trying to bring this issue to people's attention and why I am strongly suggesting that all check out what it is projected they will get as state pension. As you say, if the right NI contributions ain't been paid and not enough of 'em (35 years worth) then it won't be £144 per week but a pro rata amount depending on what type of NI contributions you have made and for how many years. The government are saying that whatever you would have been entitled to under the present system is what you, minimum, will get under the new system if you qualify for a state pension after 2017 or whenever it is that the new system comes into play.
I am concerned that people who have not paid enough NI contributions and not of the right type will be lulled into a false sense of thinking they will be getting £144 or equivalent per week state pension post 2017.
As I said above, I sent our MP three e-mails last week concerning this issue. Today, first class post, I have received a response from her.
Here is an extract from my e-mails to her:
"Assuming that this new scheme comes into effect from 2017 will those who do not have the full 35 years (not their fault after all as from 2010 I believe it was, the required number of years of NI contributions in order to get a state pension was reduced to 30) will they be able to buy back the shortfall? If not, why not? If so, how many years can be bought back and how much will each bought back year cost?
As I understand it, this £144 or equivalent come 2017 will be payable only to those with 35 years worth of NI contributions and who have also been paying the extra NI amount for the state 2nd pension.
For those who opted out of S2P and instead paid into an employment scheme (like many coming up to retirement age around about 2017) there is no guarantee, as I understand it, that they will get the full £144 or equivalent thereof even if they have 35 years worth or more NI contributions.
I've read that the government is considering what to do about such individuals. That right? When will they let us know our fate do you think?
So, not enough NI contributions and not the right type of NI contributions paid by quite a few late 50/early 60 year olds.
Things maybe not quite as they seem then. Not £144 or equivalent per week. Less than that."
and this is an extract from her letter back to me in response:
"I am making representations to the Minister regarding the precise issue that you raise in you email, and I will forward the Minister's comments to you in due course. I have also sought clarity regarding the existence of a helpline number to ring if you have any questions particularly associated with your own financial situation...............I do appreciate that the scale of the changes means that constituents are understandably concerned about how they will be affected now and in the future."
You can at present apply to HMRC for a National Insurance statement to check if you have gaps in your record. The link below will take you to the form.
Also your comments As I understand it, this £144 or equivalent come 2017 will be payable only to those with 35 years worth of NI contributions and who have also been paying the extra NI amount for the state 2nd pension. I think is incorrect the readings I have so far indicate a "Full National Insurance record" and that consists of above the following :-
- you were working and paying National Insurance
- you were getting certain benefits, eg for unemployment, sickness
- you were a parent or carer and claiming certain benefits or credits
- you have a spouse or civil partner whose National Insurance contributions cover you
- you were paying voluntary National Insurance contributions
Sincerely hope I am wrong Kenny, but have a read of this and then tell me if I am misunderstanding things.
"What is the 'contracted out deduction'?
Anyone who was in a contracted out pension scheme for part of their working career will have given up some of their state pension rights and the amount they have given up will depend on the years in which they were contracted out and their earnings. The amount of state pension which they relinquished entitlement to is shown on their state pension forecast as a 'contracted out deduction' or 'COD'.
What happens with the contracted out deduction?
It will be deducted from the £144 flat rate state pension when calculating the Foundation Amount in 2017. A statement will be prepared for everyone as at April 2017 to check what pension entitlement they have under the existing system and compare it with what they will receive under the new system. Millions of people have some contracted out rights from time when they contributed to a private or employer pension scheme. Their state pension forecast will show a 'contracted out deduction' which is the amount of state pension they gave up when they were contracted out into the private pension that will replace these state benefits. This contracted out deduction needs to be deducted from their £144 a week state pension entitlement."
(it's an extract from the link I posted yesterday at 14.31)
Agree with you totally that people need to check out individually where they stand pension wise in all of this as it will be different for different people depending on how many NI contributions made and what type.
Bet HMRC has been/is/will be inundated with enquiries. Must do mine. I know what I will be entitled to under the present system - will be interesting to see what they project for me under the new one. Thanks for the link.
Here's another link for getting a state pension forecast
https://www.gov.uk/state-pension-statement
Think I'll be asking questions like.....
1. I know how many years worth of NI contributions I've made, but how many non contracted out ones have I made?
2. What is my projected state pension under the present scheme?
3. What is my projected state pension under the proposed scheme assuming the full basic pension is £144 per week at today's rates.?
Will be interesting to see what comes back.
oh and then there's this link https://www.gov.uk/future-pension-centre
The statement "This contracted out deduction needs to be deducted from their £144 a week state pension entitlement" is technically wrong.
The "Contracted out Deduction " or COD is applied now to pension calculations, if you have been in contracted out employment for any period between 6/4/1978 to 5/4/1997 they take your earnings during the contracted out period and from this deduct COD, how COD is calculated I cannot say (I have been involved in the payroll industry for all my working life and have not had the time to research this figure). It is the resultant figure that becomes your "Additional State Pension", I hope that you can see that it will not be deducted from your £144 but will be part of the calculation that will be provided in 2017 as to how your additional pension figure is calculated.
In addition to this if you worked during the years 1961 and 1975 you will be entitled to Graduated Retirement Benefit based on contributions made during that period of time. Also if you had been in contracted out employment since 6/4/2002 then there will be a payment of Additional State Pension based on earning from this date.
In addition to all of this is the qualifying years from your National Insurance record. I do not think that you will get answers at the moment to item 3 at present, this being due to there having been no training of DWP staff in the new rules as yet because they are not yet law. If like me you have kept all of the year end tax documents form "P60" from your employers for your working life then they will tell you which years you have been in contracted out employment. If you have a national insurance code "A" or "B" then you where in NON CONTRACTED OUT employment, if its "D" or "E" then it was CONTRACTED out employment.
The pension calculations have been confused for many years due to politicians tampering, adding and dropping parts of the state pension scheme since the 1960's this has made the whole subject very complicated. I think the goverment has been brave to attempt to consolidate all of this back into a new flat rate state pension scheme. The scheme is not perfect at present but it will get the nation away from means tested extra pension, it is being further complicated by the need to revise retirement dates and to bring male and female retirement dates into line.
It is the changes to retirement dates that is concerning and confusing me at present and it is this that I am focusing on.
@Webmaster if Lynne requests it you may pass on my email address to Lynne if she wishes to email me direct with any questions that I may be able to help with.
Thank you for that er.......clarification Kenny.
As I've been in and out of paid work, and in and out occupational pension schemes, and in and out of full time and part-time paid work since 1973 (and not forgetting 3+ years of post aged 18 full time education) it seems from your posting above that I'll have a whole mixed bag of NICs that will go towards my state pension however it is that it gets calculated (if I ever end up getting it of course as so far I've had three increases in age qualification)
And it would be nice to know ASAP what that means in terms of the new scheme as well as the present one, then me and everyone else caught up in this "let's change state pension age/qualification rules a few years before they reach retirement" nonsense will know where we stand.
That is of course.................. until they change it again (which no doubt they will).
And thank you for the offer of your e-mail address. I've contacted the future pension centre with my queries. I'll see what they say in response. And I hope they do get training pretty quickly because me and many thousands like me need to know what to do and how much it will cost (in terms of buying back years) to get as much state pension as we can post 2017 or whenever it is that this new system will actually be introduced.
Funny isn't it,
I was told at the age of 25 if I wanted £10,000 a year when I retired I would need to put in over £100 a week, equalising this to the £140 ish state pension = ££70 a week.
I assume all those that wing about what they are getting are the same people who pay the lowest amount in £4.10 a week, and still want free bus pass, dental, glasses, medicines, tv licence, reduced rates at the pub for food and cheaper hair cuts.
Yes I have heard "we have paid into this system for 40 years" "we are entitled to it"
I have paid in for some 28 years, I no longer work (nor am I entitled to benefits), I also paid in an average of £60,000 a year in employers N.I contributions of which I receive no benefit at all.
I am led to believe that when my official retirement age comes I'll probably get nothing.
So I have allowed for that and made sure we have enough provision to live a reasonable life.
It's not luck nor is it inheritance, it's damn hard work.
Can you all please get off your soap boxes step back and have a look at what you get, consider how much you really have paid for this provision, thank your lucky stars you live in Britain, have a cup of tea and find something deserving to wing about.
"I am led to believe that when my official retirement age comes I'll probably get nothing.
So I have allowed for that and made sure we have enough provision to live a reasonable life."
But we weren't , and for many of us the rules have changed too late for us to be able to do what you have done.
B&Q like to employ older people.
I remember my parents discussing pensions and saying they needed private ones as the state one was likely to run out of money, that was 30 years ago.
How much notice do you require?
How much does one need to live on ?
We have just had soup for lunch (homemade for less than £1), sat in our lounge at 13.5C
Tonight we will sit in front of our log burner as we have no other heating system, throwing into it scraps of wood that cost nothing.
We buy coats/jumpers and boots when reduced in March ready for the next winter.
We grow our own veg and collect fruit from the wild.
Maybe we are just a little old fashioned for our age, or maybe we just value our money because we worked so hard for it.
@Andysport - other than this response i don't intend responding any more to your postings on this thread.
Why don't you start a fresh thread?. Feel sure that others might be interested in your thoughts on state pensions and related matters. This far down a thread your postings will not be read by as many who might do so if you started a new thread. Feel sure an interesting debate might take place.