Yes but my online pension statement explicitly states that they cannot give figures for the new rules yet and does not give a figure for the new rules. As I will reach state pension age under the new rules this is not very useful Under the old rules I could have continued to accrue state second pension at the rate of 1.77 per qualifying year which would have given me a pension in today's terms of about 158 quid a week, however because state second pension is being abolished in 2016 I will only have accrued about 141 quid a week which is less than the new flat rate pension so I will get the new flat rate, but in reality in terms of lifetime return, I am losing 8000 odd quid over pension lifetime by them raising the state pension age and on the notion that I last till I am 75 that's a loss of about 17 or 18 quid ish a week .
In 2011 the government changed the law to bring forward the increase of the State Pension age to 66 so that it will finish by 2020. This was done to make sure that the costs of the State Pension system remain manageable as life expectancy continues to increase. The Chancellor announced the government’s intention to bring forward the increase in State Pension age to 67 between 2026 and 2028 in his 2011 Autumn Statement. The publication of ‘The single-tier pension: a simple foundation for saving’ in January 2013 confirmed this and the legislation for the change is included in the Pensions Act 2014.
Although I am a few years ahead of you, my written statement has figures (estimates ) for both. The higher of the two applies which happens to be the figure under the old rules. Shouldnt that be so in your case?
If you request the statement online, then it is not a written statement that they send you, it is a live application that tells you what your statement is in the browser there and then and the application that provides it does not calculate the new rules. However because I know what the new rules are, I know that my old rules statement of 138 quid a week (roughly) means that even if I accrue another 20 months NI contributions before April 2016 that will at most push my old rules statement up by 3 quid or so, 141 quid will be less than the new rules maximum, which is expected to come in on 6th April 2016 at £155 a week which means that from here on in until I reach state pension age the maximum flat rate pension is as good as I can ever expect to get from the state. After April 2016 no amount of additional NI contributions will make any difference as State Second pension is abolished and the flat rate is the maximum figure you can get under the new rules i.e. if you have 35 qualifying years. People with less than 35 qualifying years at state pension age after April 2016 will get a reduced pension i.e. less than the new flat rate by some pro rata'd amount. You can see what the government has done here as these are huge changes, people retiring now with 50 odd years of Graduated/SERPS/State Second Pensions NI contributions are retiring on over £200 a week in many cases, that is now gone, the maximum they will pay out under old rules in future will be based on the NI contributions up to 6th April 2016, in other words your total qualifying years at 6th of April 2016 even if you reach state pension age in 2025 like me. So from April 2016 fewer and fewer people will get more than the new flat rate, only those that had already accrued enough years of Graduated/SERPS/State Second NI contributions will get more than the maximum flat rate which is expected to start at 155 quid a week, additionally by pushing out the horizon on eligibility for state pension they cut down the overall ongoing bill quite substantially. There are few if any winners (apart from the government) in all this apart from maybe the long term self employed. In my personal case the difference between what I will get and what I might have gotten under the old rules is so small as to make no difference, but being forced to wait till I am 66 does make a very large difference.
Not simple, is it. Their estimate for me, under the old rules, is around the £200 p week mark, after a deduction for being contracted out for a spell. They say in their written statement that thats the one I will get.
Same here. I went Uni and they offered me to pay something like £900. I called them and some guy said there had been an extension to the retirement age and I would qualify so I didn't bother. I did contact them not long ago and they said I would not be eligible for the full state pension at retirement age!! Hope my private one makes up for the shortfall but I'm annoyed with the state pension outcome.
Yes. The private pension will help us that have them. But every little helps and it would be nice to get the fullest state pension possible.
So basically, for us 'youngsters', it wont be easy, the retirement age will probably rise again and the payouts will reduce, the advice to invest in bricks and mortar being a better idea is still valid. Luckily, I have a dormant stakeholder pension with the bank, haven't contributed to it for 12 years, maybe I should get a move on to get it going again. I also have just started a workplace pension with NEST, but at 45, it wont be worth much. Looks like I'll have to top those 2 up in the next few years just to get something out of them on retirement in 2035 (yikes!) or a life of beans on toast awaits...Happy Days
I've had a few company pensions which are a bit of a waste in my line of work due to moving around a fair bit. I think all in spread over them there is about 6 grand, I get mail telling me its costing money having these because of the small amount in them. Bricks and motar as Rob says is the way to go and something I'm looking at getting into in the next couple of years. I just think for those of us around the middle aged mark state pension is a bit of a waste.
"Scenario 2: You die whilst receiving an annuity income Traditionally, an annuity is the most common way of providing a retirement income. It offers the security of an income that will never run out, but typically dies with you. This doesn't need to be the case. It's possible to have that security but also the comfort of knowing your dependants or beneficiaries will be provided for after your death, but only if you choose one of the options below when you buy the annuity. Once set up, an annuity cannot be changed or cancelled so it's important to choose options carefully. Choose a joint life annuity - Income will be paid to your dependant (usually your spouse or partner) if they outlive you. You can choose how much income they receive (usually 50%, 66% or 100% of the income you were receiving). Choose a guaranteed period - Income is guaranteed for a set number of years, even if you die before this. The income would then be paid to your beneficiaries for the rest of the guaranteed term. Choose to build in an annuity protection lump sum (value protection) - On death the fund used to purchase the annuity, less income already paid, can be paid out as a lump sum. Lump sums paid out as value protection are subject to the same tax charge as lump sums from income drawdown, so could be taxed at 45%. In addition, if the lump sum is paid to your estate rather than to your beneficiaries, it may be subject to IHT. Depending on your circumstances, there is the choice of selecting as many (or as few) of the above options as required. These options usually reduce the starting income to cover the cost of providing additional benefits. However, without them the pension will be lost on early death and any surviving spouse or partner may be left short of income." http://www.hl.co.uk/news/articles/new-rules-what-happens-to-your-pension-when-you-die
Jim, they've brought it back six months. So in fact you will be 65 and six months when you get the state pension. Same as me. till they change it again 1n 2016.
I just ran the calculator at https://www.gov.uk/calculate-state-pension/y and it still says on my 66th birthday?
This reflects my understanding of my UK State Pension circumstance. .... "I reach State Pension age after 6 April 2016 I have contributions in the current scheme. How will my single-tier pension be calculated? Under the Government’s proposals, National Insurance contributions and credits awarded before the new single-tier system starts will be recognised. When single tier starts we will look at your National Insurance record and work out its value under the single-tier rules. At the same time we will work out what you may have got under the present state pension rules. For both valuations we will make a deduction to take into account any periods when you were contracted out of the additional State Pension. Also the minimum qualifying year requirement will apply. The higher of these two amounts will then become your single-tier foundation amount. You could be in three positions: your foundation amount could be equal to, more than or less than the full single-tier pension. Please read on for more details. " https://www.gov.uk/government/uploa...1237/single-tier-pension-fact-sheet.pdf#page5
Yes that is a subtle distinction John, I had missed the deduction for periods contracted out of additional State Pension, that means that my £155 could be minus a deduction for 4 years contracted out and possibly I have just realised another 5 years maybe contracted out in a final salary scheme, my 14 years self employed also represent effectively being contracted out as you don't earn additional State Pension as a self employed person, so I might have 48 qualifying years but 23 of them might be deductible, not in terms of qualifying years but in terms of what would have been earned for additional State Pension, which would also explain the difference between you and I as we both have the same number of qualifying years just now but a very different forecast, I'm probably being reduced down to £138 because I currently only have 14 years out of the 37 in SERPS and additional State Pension.
Yes it all helps. The days of offsetting with retirement in PI isn't an option either. Gone are the days of living like a king on £500 a month
Well, I, like probably many of us, never really took much interest throughout my career, when it came to pensions in general. As it is getting nearer the time for me I am beginning to focus in a little more than ever before. And wanted to take stock of my UK state pension pot. I still am not 100% conversant with the fine detail but having received the written statement from DWP (it took about 6 weeks ) and spoken to them on the phone about it I am a little clearer than I was a few weeks back. Interestingly, in essence, the DWP are the only people that have a formal record of my state pension pot history. I think I tried to use the government portal that you mention, Oss, but cannot get onto it from here (it was the same for online tax with HRMC - couldn't do that either ). One thing DWP have said to me is to go back to them in 2016, once the new system is implemented, for a more precise estimate of where my state pension fund is heading.
A single person could still have a decent life on £500 a month the local people are still earning a lot less than that, but it would not be as comfy as it was 10 years ago. I could live acceptably with my family over there on £850 a month if it was not for Ana's extravagance. When I do finally retire I should have more than 850 a month by a fair margin between state and private pensions but I suspect the Phils will not be an even less attractive place financially by then. Just have to see what the years bring I suppose.
I will be asking them for a statement of NI contributions next so I can see exactly what they think was happening in the past and so I can check if any mistakes were made, not sure I could do anything if mistakes were made though.
i always struggled to earn a living--periods of unemployment--redundancy--self employed commission only--not getting paid etc. never had anything worthwhile to put in a private pension plan--except for a short while with abbey life--25 years ago. later--after being unemployed--i was told by them i couldnt have a pp if i was unemployed---go figure ! that pp with abbey is now worth less than a pound--A YEAR lol.
